A company’s cash holdings are closely related to its
performance and market capitalization, as well as the decision preference and
management mode of managers. Among the factors affecting cash holdings, the
social relationship between the most two important executives of a company, CEO
and CFO, plays an important role. Accordingly, this paper studies the influence
of fellow villagers’ relationship and alumni’s relationship on cash holdings of
listed companies, which not only enriches the literature about the impact
factors of CEO-CFO social relationship, but also provides practical guidance
for cash holding adjustments of listed companies.
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