This article empirically tests the association between environmental uncertainty and corporate cash holdings and whether CEO ability moderates this association. Based on the precautionary motive for holding cash, we predict that firms will hold more cash when operating in an environment of high uncertainty. To test this prediction, we utilize a panel of non-financial U.S. firms throughout 1980–2016. Using the coefficient of variation in sales as a proxy for environmental uncertainty, we find that environmental uncertainty increases firm cash holding. We then explore the moderating role of CEO ability and find that more-able CEOs weaken the positive association between environmental uncertainty and cash holding. Further, the results demonstrate that small-sized, financially sound, and low leveraged firms are likely to hoard more cash during periods of heightened uncertainty. Our study provides new insights for investors, shareholders, and policymakers into companies' decision-making concerning liquid assets.

中文翻译：

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环境不确定性与企业现金持有：CEO能力的调节作用

本文实证检验了环境不确定性与企业现金持有量之间的关联，以及 CEO 的能力是否会缓和这种关联。基于持有现金的预防动机，我们预测企业在高度不确定的环境中经营时会持有更多的现金。为了检验这一预测，我们在 1980-2016 年间利用了一组非金融美国公司。使用销售变异系数作为环境不确定性的代表，我们发现环境不确定性增加了公司的现金持有量。然后，我们探讨了 CEO 能力的调节作用，发现能力更强的 CEO 削弱了环境不确定性与现金持有之间的正相关关系。此外，结果表明，规模小、财务稳健、在不确定性加剧的时期，低杠杆公司可能会囤积更多现金。我们的研究为投资者、股东和政策制定者提供了有关公司流动资产决策的新见解。