An Empirical Study On The Effect Of The Listed Companies Corporate Governance Structure On Cash Holdings Of The Manufacturingin China

The policy of cash holdings in a company is an important link of the enterprisefinancial management of the enterprise financial management, cash holdings not only inrelation to production and management of the enterprise in daily activities, but alsorelated to other investment, financing and the financial decision-making dividenddistribution, and so on. How much cash held by the enterprise, not only by the manager,but also associates with the characteristics which industry the enterprise live in and thecorporate governance structure level factors of the enterprise.The paper make empirical research which based on the agency cost theory, thepecking order theory, asymmetric information theory, static tradeoff theory andtransaction costs theory as the theoretical basis between corporate governance structureand cash holdings relationship, and based on previous studies, combine with thecharacteristics of the manufacturing companies, introducing the variables of theinstitutional investors.Based on the 574 samples of listed companys of manufacturing from year 2005 to2008 in shenzhen and shanghai city interval, through the analysis of the behavor of thehold of cash and the equivalents, combine with the actual situation of the listed companyof manufacturing, we find various important factors which reflects the governancestructure of listed companies, then use for reference of some mature achievements of theprevious research , introduce some other non-governance structure misc variables whichinfluential to cash holdings for reserch, put forward the relevant research hypothesis.Next, make use of SPSS 15.0 software to analysis 2296 samples. The result of analysisshow that: the concentration of equity is positive correlating with cash holdings, the ratioof circulation stock is negative correlating with cash holdings, the ratio of legal personsshares is negative correlating with cash holdings,the ratio of ownership has no significantrelationship with cash holdings, the ratio of institutional investors shareholding has nosignificant relationship with cash holdings, the ratio of State-ownshares and the characterof the largest shareholder has no significant relationship with cash holdings, the boardsize and the independent director proportion have no significant relationship with cashholdings too. The corporate governance of the influence of cash held in China, theconclusion shows that the corporate governance structure and cash holdings hassignificant influence, but at the same time, China is still not perfect governance structure,management incentive to senior management personnel to produce significant influence,investors are not play their due role of supervision and guidance, enterprise shareholdingstructure is unreasonable. The empirical research papers in view of the above results, and puts forward how toimprove corporate governance structure, including the improvement of equity structureand improve management incentive and how to play the positive role of institutionalinvestors, in order to better advice for cash holdings policy, more effective use of cashthis most liquid, the weak profitability of special assets.