If Excess Cash Holdings Will Lead To Executives Corruption?

Anti-corruption has been one of the central tasks of the party and the country over the past 30 years of reform and opening-up,and has equal importance to the social development of economic reform.With the rapid development of economy,enterprises also have different degrees of corruption.At the beginning of this century,thewell-known foreign companies such as Enron,WorldCom corruption cases,and in recent years,China Resources Enterprises,China Mobile and the PetroChina corruption case exposure,people gradually recognize the seriousness of corporate corruption.The state has promulgated a series of rules and regulations for the eradication of corporate corruption.Especially for the high salary of corporate executives,the cost of operating expenses unrestrained and other issues to make clear and detailed provisions.Under the high-pressure environment of anti-corruption,enterprises excess cash holdings are attracting more and more attention.Now,we live in a “global economy” and the uncertainty of business environment is increasing,so corporates from all over the word continue increasing cash holdings year by year.The excessive cash holdings will inevitably lead to the idle funds,reduce the efficiency of resource allocation,increase the opportunity cost of holding,damageto enterprise value.It also cause serious agency problems andlay the material foundation for the breeding of corruption.Therefore,based on the motivations of the excess cash holdings to study their effects on executive corruption.In this paper,all the A-share public companies in China are studied from 2013 to 2015,and the data of implicit corruption and explicit corruption are collected by hand.Using the multiple linear regression method to analyze the relationship between excess cash holdings and corporate corruption.According to the nature of the different property rights,study on the relationship between excessive cash holdings and corruption in state-owned enterprises and private enterprises.It is found that: on the one hand,the excess cash holdings of enterprises are more likely to form implicit corruption;and compared with private enterprises,state-owned enterprises excess cash holdings more easily lead to implicit corruption.On the other hand,compared with the private enterprises,the more excess cash holdings of state-owned enterprises,the more serious of executives explicit corruption.In this paper,the relationship between excess cash holdings and executive corruption is discussed from a new perspective.The mechanism and influence of excess cash holdings on the corruption of senior executives are investigated in the context of the anti-corruption system.At the same time,from the nature of property rights of enterprises toanalyze the relationship between excess cash holdings and different types of corrupt behavior.This paper not only provides a detailed analysis of the corrupt behavior of executives,but also explores the possibility of triggering the corruption of executives from a new perspective.It provides a theoretical basis for preventing executives corruptionfrom corporate cash holdings,and makes further research on the field of executivescorruption.