Sea surface temperature anomalies and cash holdings: Evidence from fisheries companies

Abstract

This study examines the impact of sea temperature anomalies on the cash holdings of fisheries companies from 27 countries for the period of 2013–2019. The main findings using a dynamic panel regression revealed a positive relationship between temperature anomalies and cash holdings. We find that firms tend to hold more cash to response the high temperature anomalies. This strategy is taken as a precautionary action to tackle climate-related risks, supporting the cash management and nature resource-based view theory. This precautionary cash will lead to underinvestment, hurting the fisheries industry growth. Thus, policymakers and corporate management must prioritize their efforts in the climate change campaign to avoid higher sea temperature anomalies.