This study sets to investigate the impacts of environmental, social and governance (ESG) standards on the value of cash holdings firm in Japan for the period 2005 to 2017. The results indicate that the marginal of cash is sensitive to firms’ ESG score. It shows the marginal value of its cash is increased 0.300¥ when companies investing in ESG standards. In addition, companies with high ESG score have more marginal value of cash than companies with low ESG score as much 0.028¥. The result confirms the stakeholders theory that cash value is higher for more social responsibility firms. This study contributes to our understanding of how firm managers engage with the ESG activities and the impact of such activities on firm operating strategies and cash holding performance.

Chapter 1: Introduction 1
Chapter 2: Literature Review 5
2.1 Theories Framework 5
2.2 ESG Score 7
2.2.1 Environmental 8
2.2.2 Social 9
2.2.3 Governance 9
2.3 Cash Holding 9
2.3.1 Control Variables 10
2.4 ESG and Cash Holding 11
Chapter 3: Data and Methodology 14
3.1 Data 14
3.2 Methodology 14
Chapter 4: Empirical Findings and Discussion 17
4.1 Descriptive Statistics 17
4.2 Multivariate Results 19
4.2.1 Quantitative Easing 21
4.2.2 Marginal Value of Cash Holding 22
4.2.3 Marginal Value of Cash Holding in Downgraded/Upgraded ESG Score 25
Chapter 5: Conclusion 28
References 29
Appendix A: Research Variables, Code Identifiers, and Description 35

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