Will the applications of big data affect corporate cash holdings? Evidence from China

Although the effects of digital technologies on corporate financial decisions have been widely studied, how big data applications affect corporate cash holdings remains underexplored. To address this gap, this study employs the staggered DID method to assess the effects and mechanisms of big data applications on corporate cash holdings based on a sample of 39,070 observations from Chinese listed companies between 2009 and 2022, using China’s Big Data Comprehensive Pilot Zone (BDCPZ) policy as its analytical lens. The results reveal that big data applications reduce corporate cash holdings, supported by a series of robustness tests. Furthermore, we find that big data applications reduce corporate cash holdings by intensifying firms’ intangible asset accumulation and R&D investment. Our findings corroborate the trend towards low-cash business models among enterprises under widespread big data utilization, providing further evidence for the transition towards a cashless society in the digital economy era.