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| Research on the Impact of Risk Information Disclosure of Customers’ Annual Report on Cash Holding Decision of Enterprises |
| LIU Chen，WANG Junqiu，QIU Muqing |
| East China University of Science and Technology, Shanghai, China |
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Abstract Using the textual data of the top five listed customers and their annual report risk information disclosure, this study empirically tests the mechanism and economic consequences of the risk information disclosure in the annual reports of customers affecting on the company’s cash holding decision-making. The results show that the more risk information disclosed in customers’ annual reports, the higher the level of corporates’cash holdings, indicating that the risk information disclosure of customers’ annual reports has supply chain spillover effect. The above positive correlation is more significant when the supply chain relationship is closer and the level of corporate financing constraints is higher. Further, the risk information disclosure of customers’ annual reports can reflect their basic risks and future risks. The effect mechanism of the risk information disclosure of customers’ annual reports on corporates’ cash holdings is to improve their own risk level. The economic consequences test finds that the more risk information disclosed in customers’annual reports, the higher the value of corporate cash holdings.
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Received: 03 January 2022
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