Abstract
This paper explores whether Management Discussion and Analysis (MD&A) can provide incremental information to peers using the data of Chinese A-share listed firms. It is found that positive peers' MD&A tone encourages firms to hold more cash, particularly in industries with fewer institutional investors' site visits. Moreover, this association is moderated by predation risk and the decision-making environment. Specifically, this effect is more pronounced for firms that are market followers or financially constrained, and it is also stronger for firms operating under higher economic policy uncertainty or solely in the domestic market. Overall, our findings enrich the information channels of peer effects in cash policy.
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