This study investigates the impact of firm risk on the value of cash holdings, and how corporate social responsibility (CSR) affects this relationship considering controlling shareholders. Using a sample of Taiwanese publicly listed firms from 2005 to 2018, we find that firms' CSR activities are more positively associated with the value of cash holdings because of controlling shareholders' incentive effects in most cases. Moreover, the precautionary view suggests that high-risk firms positively influence the value of cash holdings. Interestingly, considering controlling shareholders weakens the moderating impact of CSR engagement on the relationship between firm risk and value of cash holdings. Thus, CSR is an important determinant of corporate cash policies among Taiwanese firms. Our empirical results provide managers, investors, and policymakers with important decision-making insights.
