Font Size: a A A

The Theoretical And Empirical Research On Enterprise's Cash Holding Behaviors

Posted on:2018-12-08Degree:DoctorType:Dissertation
Country:ChinaCandidate:Q W ZhangFull Text:PDF
GTID:1319330512988322Subject:Business management
Abstract/Summary:PDF Full Text Request
The relationship between cash and enterprises is just like blood and the human bodies.The blood flows to the body everywhere,and the cash flow runs through production and operation of the enterprise.The blood left the body becomes dry and useless,and the cash taken away from the enterprise loses its value-added capacity;the human body without blood will lose vitality,and the lack of cash will make the companies not be able to operate continuously,i.e.there is no life without blood,and there is no enterprise without cash."Cash is the king,Being steady first,Holding reasonably,Efficiency is highest" has become the main theme of most business management.The company with the financial philosophy of "cash is the gold,and creditor's right is the silver" has been established in modern enterprise management for a long time.The importance of corporate cash as an asset in corporate financial strategy and business strategy,as well as the difficulty of corporate cash flow forecasting and corporate cash demand forecasting,mean that the merits of cash holdings behavior are not only a measure of a corporate financial management capability,but also more related to the success of corporate strategy.In 1996,Brealey and Myers have stated that how to determine the company's cash holdings is one of the top ten difficult problems in the financial community,and the solution of this puzzle will promote the modern enterprise management level to a new stage.Although previous study on research of the motivation and influence factors on corporate cash holdings was relatively systematic and comprehensive,and there were also a large number of papers studying on the relationship between the corporate cash holdings behavior and corporate performance using the tradeoff theory,free cash flow agency theory and pecking order theory,there was little research on how to hold cash and if there was an optimal cash holdings behavior.In the research on corporate cash holdings adjustment,it was found that the optimal static or dynamic target existed,but there was no clear definition of corporate cash holdings behavior,and the impact of corporate cash holdings behavior of different dimensions and attributes on corporate performance by default was the same.The difference on corporate cash holdings behavior adjusting speed merely limited to be explained through a single adjustment costs,not taking the interaction of adjustment costs into account.Therefore,taking how the enterprises should hold cash as the research direction,firstly,through the establishment of theory model of the cash holdings game behavior between shareholders and managers,the paper demonstrates that enterprises,in any principal-agent relationship situation,exists optimal cash holdings behavior compared with the reality of the enterprise;secondly,using empirical research approach of threshold regression,according to truncated mean values to define outliers proportional coefficient method to calculate the initial critical values,utilizing the panel data threshold regression equation with 1% of the bandwidth to debug the critical values of cash holding levels and cash holding fluctuations manually,employing Chi-squared test and F-test of the large sample,the paper tests the validity of the critical value;thirdly,according to judgment standard of the enterprises' performance,it examines the results of different corporate cash holdings behavior through empirical test and finds what is the optimal cash holdings behavior;finally,it constructs the adjusting cash holdings "cost control" model,in order to better explain the reasons that the adjustment speed is different when the sample enterprise goes towards its optimal cash holdings behavior adjustment.Through the theory and empirical studies on corporate cash holdings behavior,the paper finds that:(1)Corporate cash holdings behavior can be tested effectively through holding level measured by cash concentration levels and the holding fluctuations measured by cash discrete degrees.The impact of two dimensional attributes of cash holdings on enterprise performance is significantly and incongruous.(2)Using the threshold regression model,it calculates the top and lower limits of cash holdings critical value are 0.07 and 0.15 respectively,and the critical value of fluctuations in the cash holdings is 0.07.According to the cash holdings levels and fluctuations,dynamic range is divided into three and two respectively.In view of the judgment standard of performance,the average number of corporate cash holdings between 0.07-0.15 range is the optimal level of holding.When standard deviation is less than 0.07,the cash holdings of volatility is better than when the standard deviation is greater than 0.07.Two dimensional attributes by cash levels and fluctuations can be divided into 6 kinds of corporate cash holdings behaviors based on the significant differences of the contribution to the performance,and "stable holding + optimal holding" is the optimal cash holdings behavior,which means that the mean number of corporate cash holdings is between 0.07 to 0.15,and the standard deviation is less than 0.07,contributing to the enterprises' performance most.(3)Financing constraints and principal-agent,as adjustment costs of corporate cash holdings behavior,have significant effects on corporate cash holdings adjusting speed.Financing constraints and principal-agent respectively impact on cash holdings level attribute and fluctuations attribute.The enterprises with financing constraints tend to choose high level cash holding behavior.In the enterprises with serious problems on principal-agent corporate,cash holdings behavior fluctuation range is larger,resulting in corporate cash holdings behavior adjustment is inert,and influencing cash holdings adjusting speed.Two adjustment costs separately influence cash holdings behavior and then affects the adjusting speed,in addition,the principal-agent adjustment costs have some adjusting effects on financing constraints and corporate cash holdings behavior,due to consistent degree between the profits of the principal and agent,significance of the degree and effect of the direction are different.(4)The cash holdings behavior of state-owned enterprises is better than non-state-owned enterprises,and mostly are the "stable holding + optimum holding".The adjustment cost is lower,and the adjusting speed is faster.Adjusting speed of the non-state-owned enterprises is relatively slow.Cash holding behaviors mostly are “fluctuation holding + conservative holding”,but the non-state enterprise cash holdings behavior performance contributes more than state-owned enterprises.In the paper,research on corporate cash holdings behaviors has enriched the theoretical analysis method in that field.The research conclusions can help enterprises to understand cash holdings behavior in a more complete and systematic way,to review and evaluate their cash holdings behaviors,to reassess their cash management ability,to reduce cash holdings fluctuations,so that enterprises can better develop the value of cash resources,expand capital appreciation efficiency,and make cash holdings strategy effectively,which has a strong theoretical guidance and application value.
Keywords/Search Tags:Cash Holdings, Optimal Cash Holding, Cash Holdings Adjustment
PDF Full Text Request
Related items