Impact of sustainable information environment on corporate cash holdings and the moderating role of sustainable regulatory environment
摘要
This research examines the moderating role of sustainable regulatory environment on the relationship between Sustainable Corporate information environment and cash holdings in India and Pakistan. Corporate information environment comprises of firm level factors that generate information for cash holdings decisions. Little is known about the impact of sustainable regulatory environment on company’s financial decision making. This study contributes to the UN’s SDG 8 and SDG 16 goals. For analysis, firm level data and two WGI indicators of India (409 firms) and Pakistan (171 firms) are taken from Year 2000–2022. Data is analyzed using two step Systems GMM technique after preliminary analysis. The results show that Regulatory Environment significantly moderates relationship between corporate information environment and cash holdings in India and Pakistan indicating the importance of regulatory environment for informed cash holding decisions aligning with SDG 8’s goal of economic development and SDG 16’s target of institutional transparency. Findings implicate that managers and investors should recognize cash as quality signal for firms affected by regulatory environment and policy makers should consider the significance of regulations in corporate sector. This is the first study to examine the role of regulatory environment between corporate information environment and cash holding decisions in Pakistan and India.