Does common ownership affect the value of cash holdings?

Abstract

Common ownership and the value of cash holdings have been shown to increase dramatically in recent decades. This paper investigates whether there exists a link between them. The empirical results show that common ownership positively affects the value of cash holdings. Further analysis indicates that common owners with industry expertise contribute to the effect of common ownership and the value of cash holdings. More interestingly, common ownership is shown to contribute to the upward trend of the marginal value of cash over recent decades.