Is the cash holding influenced by corporate reputation in the banking industry? Primary evidence

Reputation and trust promote better and long-run relations among different groups. As the relation between the bank and its customers/stakeholders generates a network, in this paper we want to assess, using the Network Analysis instrument, if there is a connection between a bank reputation and its liquidity level, in terms of its Cash Holding trends. The main purpose of the study is to integrate the existing literature with a new Index of General Reputation (IGR), that brings together the strengths of the qualitative and of the quantitative models, through the adoption of the Network Analysis as a score rating system. This is a first exploratory research. In the future, we will extend the study to other liquid items of the financial statements, in terms of high quality liquid assets (according to the BCBS definition) and to the funding side of the balance sheet.