Pressure-Driven Cash Holdings Under Biodiversity Risk

Kangding Wang; Tongbin Xu; Min Yang

doi:10.1111/eufm.70064

Pressure-Driven Cash Holdings Under Biodiversity Risk

Kangding Wang, Tongbin Xu, Min Yang

Management

Research output: Contribution to journal › Article › peer-review

Abstract

This study examines how biodiversity risk affects corporate cash holdings and the mechanisms shaping this relationship. We find that firms facing higher biodiversity risk significantly increase cash reserves. Internal CSR governance and external institutional pressures both reinforce precautionary cash policies, highlighting the importance of internal capabilities and external pressures. The increase in cash is sourced primarily from reductions in discretionary spending rather than external financing. Higher cash reserves mitigate the adverse effects of biodiversity risk, helping firms preserve financial performance, mitigate uncertainty, and maintain ESG commitments. Overall, our results underscore the precautionary nature of corporate cash management under biodiversity pressures.

Original language	English
Journal	European Financial Management
Early online date	7 Apr 2026
DOIs	https://doi.org/10.1111/eufm.70064
Publication status	E-pub ahead of print - 7 Apr 2026

Data Availability Statement

The data that support the findings of this study are available on request from the corresponding author. The data are not publicly available due to privacy or ethical restrictions

Funding

The authors have nothing to report.

Keywords

biodiversity risk
cash holdings
CSR governance
institutional pressures
precautionary motive

ASJC Scopus subject areas

Accounting
General Economics,Econometrics and Finance

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10.1111/eufm.70064Licence: CC BY

Cite this

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abstract = "This study examines how biodiversity risk affects corporate cash holdings and the mechanisms shaping this relationship. We find that firms facing higher biodiversity risk significantly increase cash reserves. Internal CSR governance and external institutional pressures both reinforce precautionary cash policies, highlighting the importance of internal capabilities and external pressures. The increase in cash is sourced primarily from reductions in discretionary spending rather than external financing. Higher cash reserves mitigate the adverse effects of biodiversity risk, helping firms preserve financial performance, mitigate uncertainty, and maintain ESG commitments. Overall, our results underscore the precautionary nature of corporate cash management under biodiversity pressures.",

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KW - cash holdings

KW - CSR governance

KW - institutional pressures

KW - precautionary motive

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Pressure-Driven Cash Holdings Under Biodiversity Risk

Abstract

Data Availability Statement

Funding

Keywords

ASJC Scopus subject areas

Access to Document

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