Objectives

This article aims to investigate how local leaders’ promotion is governed by the central state's concerns of maintaining political legitimacy in China.



Methods

We offer a theoretical framework regarding how to understand the statistical association between economic performance and local leaders’ promotion in China. The empirical work is based on Probit models that were applied on a panel of data covering local leaders of 335 cities between 1999 and 2009.



Results

Our research confirms that a better record of relative local economic growth significantly boosts the promotion probability of the city-level party secretary. However, the importance of economic work will significantly decrease if the cadres have strong open signals of their competence.



Conclusions

The findings in this article suggest that there exists a performance-based screening scheme for selecting political elites in China. Portraying the positive image of political elites by the “tags” of their capacity in fostering economic development helps to boost both regime legitimacy and political authoritativeness in the Chinese-style authoritative political regime.

Incentive or Selection? A New Investigation of Local Leaders’ Political Turnover in China*

This paper examines the impact of internal information quality (IIQ) on corporate cash holdings in China. Employing two widely used IIQ measures (i.e., the earnings announcement speed and the absence of financial restatements), we show a significant and negative association between IIQ and corporate cash holdings. This negative relation is concentrated among complex firms (i.e., firms with more business segments), non‐state‐owned firms, and firms with poor corporate governance. Our findings are valid after we consider endogeneity issues. This paper suggests that the quality of the internal information environment plays an important role in influencing firms’ cash holding decisions.

Does internal information quality impact corporate cash holdings? Evidence from China

Purpose




The purpose of this paper is to investigate the asymmetric adjustment of cash holdings in Pakistani firms for above and below target firms.




Design/methodology/approach




The study employs generalized method of moments (GMM) to investigate the adjustment of cash holdings.




Findings




The study found that the firms which hold cash above the optimal level of cash holdings have higher speed of adjustment than the firms which hold cash below the optimal level. Financially constrained (FC) firms also adjust their cash holdings faster than financially unconstrained (FUC) firms but high speed of downward adjustment does not remain persistent after financial constraints are controlled. Findings of this study reveal this asymmetric adjustment in above and below target firms and extend these results in FC and FUC Pakistani listed firms, respectively.




Research limitations/implications




The conclusion of this study has been derived under certain limitations. There is a vast space to extend this study in different dimensions. Firms operating in capital-intensive industries may provide different results for financial constraints because their policy designing would be quite different from other firms.




Originality/value




This study contributes to cash holdings research in Pakistan by exploring the adjustment behavior of cash holdings across Pakistani non-financial firms using econometric modeling. Downward adjustment rate is supposed to be higher than upward adjustment rate and this rate is tested using dynamic panel data model. Similarly, it is inferred that this relationship holds for above target firms even after including the financial constraints in the presented model.

Asymmetric targeting of corporate cash holdings and financial constraints in Pakistani firms

The impact of air pollution on R&D input and output in China.

The purpose of this paper is to investigate the impact of board attributes and insider ownership on cash holdings of non-financial firms listed on Karachi Stock Exchange (KSE) Pakistan during 2008-2012. Empirical results indicate that board attributes such as CEO duality, board size and board independence are positively related to cash holdings. However, board independence is the only boards attribute which is found statistically significant. The insider ownership is significantly and negatively related to cash holdings. Alternatively, the square of insider ownership is significantly and positively related to cash holdings. The variation in signs indicates a non-linear relationship. Notably, sample firms are divided into three insider ownership structures i.e. family firm, pyramid firm and non-family firm. Results indicate that family firm is negatively while non-family firm is positively related to cash holdings. These findings indicate that family firms prefer to hold necessary amount of cash enough for their planned as well as unplanned payments than non-family firms. On the other hand, pyramid firm is positively related to cash holdings but the relationship is insignificant. In summary, empirical results indicate that board attributes and insider ownership are important predictors of corporate cash holdings for non-financial firms in Pakistan.

https://www.econstor.eu/bitstream/10419/188182/1/pjcss221.pdf

The impact of board attributes and insider ownership on corporate cash holdings: Evidence from Pakistan

A corporate cash-holding strategy is a trade-off between the costs and benefits of holding cash. At the macrolevel, firms are inclined to adjust and optimize their cash-holding strategies in response to changes in purchasing power due to inflation. At the microlevel, the operating cycle, which indicates the speed and turnover of corporate cash flow, also influences the corporate cash-holding strategy. Firms flexibly adjust their cash-holding strategies in response to changes in the internal and external environment, which is referred to as the cash adjustment strategy. We examine these predicted relationships using a sample of listed firms in China’s stock market over the 1998–2009 period. Consistent with our predictions, the empirical results indicate a significant negative association between cash holdings and the CPI, but the relationship is reversed when the CPI reaches a certain level. There is also a U-shaped relationship between operating cycle and cash holdings, and this relationship is similarly influenced by changes in the inflation level. In examining the macroeconomic environment and microlevel firm-specific characteristics simultaneously, our findings supplement the literature on firms’ cash-holding strategies and provide theoretical and practical implications.

Chunlei Song

Papers

Inflation, operating cycle, and cash holdings