Investigating the Relationship between Social Responsibility and Cash Holdings with Emphasis on the Mediating Roles of Systematic Risk Factors and Corporate Governance

The importance of cash in financial literature and decision-making realm has always made it the focus of attention of financial institutions and users of financial statements. Moreover, the issue of social responsibility and its impact on corporates’ financial and social performance has been one of the major issues in accounting and financial research for so long. Also, the relationship between these two variables cannot be studied meticulously without considering the function of other factors such as systematic risk or corporate governance factor. To this end, the main objective of the current study is to investigate the relationship between social responsibility and cash holdings with an emphasis on the mediating role of systematic risk factors and corporate governance. The required data for this study were gathered based on a systematic removal sampling method and the resulting statistical sample consisting of 118 companies between the years 2011 and 2016. To test the hypotheses, multivariate regression analysis and compositional data analysis method were conducted using the econometric software Eviews. The results show that systematic risk and corporate governance have a mediating role on the relationship between social responsibility and cash holdings; in fact, systematic risk weakens this relationship, but corporate governance strengthens it.