Oil Price Volatility, Corporate Liquidity Hoarding, and Financial Stability: Evidence from Chinese A-Share Listed Firms (2019-2023)

Abstract

In 2022, the global energy market experienced severe turbulence, with the Brent crude oil price reaching as high as 140 US dollars per barrel. As the world's largest crude oil importer, Chinese enterprises faced significant cost shocks and cash flow pressures. This study uses quarterly data of non-financial listed companies in China's A-share market from 2019 to 2023 as samples, and employs panel fixed effect regression and Bootstrap mediation effect model to examine the impact of oil price shocks on enterprises' cash holdings and the transmission path. The study finds that the oil price shock led to an average increase of 1.94 percentage points in the proportion of cash holdings by enterprises, with particularly significant responses in the manufacturing and information service industries. Defensive hoarding behavior spreads through two channels: credit contraction and commercial credit freeze, forming a self-reinforcing cycle and exacerbating the fragility of the financial system. This study provides micro evidence and policy references for understanding how external energy shocks evolve into systemic risks.