Does Credit Information Sharing Reduce Firm's Cash Holding?
A comprehensive credit information sharing mechanism is particularly important for unleashing the market value of credit information.Taking the pilot policy of social credit system reform demonstration cities as an exogenous impact of establishing a credit information sharing mechanism,this paper systematically examines the impact of credit information sharing on firm's cash holding using difference-in-differences method.The results show that the reform significantly reduces firm's cash holding,and such effect is more pronounced in firms with lower quality of information disclosure,poorer corporate governance,tighter financial constraints and weaker external supervision.Further mechanism tests show that,the reform significantly strengthens firm's credit,improves the availability of external financing and reduces agency cost.This research is helpful to clarify the relationship between credit information sharing and firm's cash holding,and has important policy implications for promoting the construction of social credit system and building a high-level socialist market economy system.
Credit Information SharingCorporate Cash HoldingCorporate CreditExternal Financing
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