Research On Macro-Economy Policy Fluctuation And Cash Resource Management Policy & Efficiency Of Listed-Firms

As the enduring research topic of corporate finance, cash resource management has always been the heated topic for both academia and practical circles. Especially in 2008, the financial crisis gave rises to the downturn of macro-economy, increased the financing cost of firms and also hindered trade activities, which made lots of firms go bankrupt due to the lack of cash resources. At that time, keeping higher level of cash resources had been the golden rule for the sustainable development of firms. However, as the unique assets with highest liquidity and are mostly likely to be appropriated, keeping too much cash resources on the contrary are easily to be the tool of managers to take part in empire building activities, and do great harm to the firm value in the long run. The above two academic viewpoints fight against with each for a long time, which makes research in term of cash management have not come to the same conclusion, because recent research from perspective of corporate governance, industrial characteristics and firm characteristics could not capture the dynamic changes of corporate cash resource management, and it also could not find the real motivation and real effect of cash resource management, which left great space for further research.In recent years, the research topic of macro-economic policies and micro-enterprise firm behavior has been the heated topic for academia, and the research on the relationship between macro-economic fluctuation and cash resource management has also been investigated to some extent. We find that, the related research just investigate whether the macro-economy factors, such as business cycle, monetary policy and fiscal policy may increase or decrease the level and value of cash resource management, while the research on the dynamic relationship between macro-economic policy fluctuation and cash resource management are needed to do, especially under Chinese unique economic context that the economic policy fluctuations more and the government has great influence on the capital market, it is urgent for us to investigate the influence mechanism of macro-economic policy fluctuation on the motivation and allocation of corporate cash resource to have deeper understanding of the real motivation and effect of cash resource management, so as to provide useful reference for policy makers, firms and investors. And fortunately, the economic policy uncertainty index developed by Baker et al.(2013)provide a great opportunity to investigate the influence mechanism of macro-economic policy fluctuation on the management policy and efficiency of corporate cash resource.Base on the macro-economy policy fluctuation perspective, and according to the research line of motivation of cash resource-allocation behavior of cash resource-allocation efficiency of cash resource, this paper investigates the motivation and allocation behavior/efficiency of list firms’ cash resources under different degrees of macro-economy policy fluctuation using case study and empirical method. This paper makes additional contributions as follows. First of all, this paper enriches the empirical evidence of research related to macro-economy policy fluctuation, and the topics about the relationship between macro-economy and micro-enterprises. Secondly, this paper clarifies the dynamic differential effect of macro-economy policy fluctuation on the changes of cash holding motivation, making additional contribution to the cash holdings motivations. Thirdly, this paper provides additional evidence about the dynamic different supportive effect of cash resources on various kinds of capital investment under different degree of macro-economy policy fluctuation based on static and dynamic perspective, enriching the empirical evidence about relationship between cash resources and investment. Finally, this paper enriches recent evidence by investigating dynamic changing of allocation efficiency of cash resources under different degree of macro-economy policy fluctuation based on static and dynamic perspective, enriching and broadening the research field to some extent. The conclusions of this paper may provide reasonable advice for policy makers to carry out more effect macro-economic and industrial policies, and also for investors to accurately evaluate firm value to make reasonable investing decisions, and for listed firms to better liquidity management levels to enhance firm value in the long run.