Impacts of Managerial Overconfidence and Agency Costs on Cash Holdings Within Blockchain Firms

Abstract

We study the effects of managerial overconfidence and agency costs in cash holdings of blockchain firms, where the overconfidence is defined as a cognitive bias that a manager will underestimate volatility in an uncertain environment. We develop a real-options game model that incorporates both overconfidence and agency costs. The theoretical results show that future investment opportunities are necessary for holding cash when agency costs are within the firm. Expected returns from blockchain projects decrease with managerial overconfidence. The level of corporate cash holdings increases with overconfidence and decreases with agency costs Using the data of Chinese listed firms from 2010 to 2019, we find that the regression results are consistent with our theoretical findings. Moreover, we find that the blockchain firms' cash holdings are higher than their peers. Our results shed some light on the impacts of behavioral characteristics on cash holdings.

Improved SVM-LSTM-based resource flow forecasting for the low-carbon urban distribution grid

“…Resource flow is the flow of funds generated by the delivery of products and services in a company's business process, which plays a crucial role in the low-carbon urban distribution grid (Sanjaya et al, 2019;Zhang and Xia, 2020). Therefore, rational forecasting of the resource flow is essential for financial decision-making, ensuring an optimal cashholding level that meets the company's liquidity needs without hindering its growth (Niu and Zhao, 2021;Zhu et al, 2024). For capital-intensive enterprises like power grid companies, with large resource flow scales and complex fund flows, efficient management of resource flow budgeting becomes particularly important (Zhou et al, 2020).…”