Government data opening and corporate cash holdings: Evidence from a quasi-natural experiment in China

We investigate whether government data opening reduces corporate cash holdings. Using the establishment of city-level open government data platforms in China as a quasi-natural experiment, we find that government data opening significantly reduces firms’ cash holdings. The effect is more pronounced when firm uncertainty is higher, when firms are more financially constrained, when firms are non-state-owned, when firms trade less in the internal market, and when there are fewer alternative information sources in a region. Overall, our evidence suggests that government data opening reduces environmental uncertainty and firms’ precautionary cash holdings.