Foreign competition and corporate cash holdings

Das, Bijoy Chandra; Ofosu-Hene, Eric Dei; Danso, Albert; Adu-Ameyaw, Emmanuel; Uddin, Moshfique

Foreign competition and corporate cash holdings

Das, Bijoy Chandra and Ofosu-Hene, Eric Dei and Danso, Albert and Adu-Ameyaw, Emmanuel and Uddin, Moshfique (2026) Foreign competition and corporate cash holdings. International Journal of Managerial Finance. ISSN 1743-9132

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Abstract

Purpose

This study investigates how foreign competition influences corporate cash holdings, an area that has received limited attention in the finance and management literature. It further explores how chief executive officer (CEO) characteristics and financial crises moderate this relationship.

Design/methodology/approach

Using a panel dataset of 2,451 US firms from 2000 to 2020, we employ multivariate regression analyses to examine the relationship between foreign competition and corporate cash holdings. We also test for moderation effects using interaction terms and address potential endogeneity concerns with alternative specifications and robustness checks.

Findings

The results indicate that foreign competition has a positive and statistically significant effect on corporate cash holdings. This effect is more pronounced during periods of financial crisis, suggesting that firms facing foreign competition increase their cash buffers in times of economic uncertainty. Additionally, CEO characteristics significantly moderate the foreign competition–cash holding relationship.

Originality/value

This study extends the literature on corporate liquidity management by introducing foreign competition as a key determinant of cash holdings. It also contributes to the upper echelons perspective by highlighting how CEO attributes shape firm responses to external competitive pressures.

Item Type:	Article
Identification Number:	10.1108/IJMF-07-2025-0365
Dates:	Date Event 7 January 2026 Accepted 17 February 2026 Published Online
Uncontrolled Keywords:	Foreign competition, Cash holdings, Financial crisis, US
Subjects:	CAH17 - business and management > CAH17-01 - business and management > CAH17-01-07 - finance
Divisions:	Business School > Accountancy, Finance and Economics
Depositing User:	Gemma Tonks
Date Deposited:	10 Mar 2026 11:19
Last Modified:	10 Mar 2026 11:19
URI:	https://www.open-access.bcu.ac.uk/id/eprint/16917