Economic Policy Uncertainty and Excess Cash Holdings: The Moderating Role of Independent Directors' Attendance

This study examines the impact of economic policy uncertainty (EPU) on excess cash holdings and the moderating role of independent directors' attendance (ATTT). Using a sample of Chinese publicly listed firms, the findings show that higher EPU leads to lower excess cash holdings, suggesting firms adjust liquidity strategies in response to uncertainty. However, firms with more engaged independent directors increase excess cash holdings under high EPU, indicating that active board oversight reinforces the precautionary motive for holding cash. The results remain robust when using the US-China Tension Index (UCT) as an alternative measure of uncertainty. This study highlights the governance role of independent directors in shaping corporate financial policies under uncertainty.