Research On Structural Differences Of Listed Corporations' Cash Holdings In Different Industries Of China

Cash holdings level is a more objective index compared with other indexes of a corporation because it is hardly affected by the intention of managers. The research on cash holdings has been restricted in the relation between cash holdings and factors from different angles of a corporation. There is no research that focuses on the structural differences of cash holdings in different industries, which, although, helps a lot deepen the understanding of how these factors affect cash holdings of a corporation.This dissertation concentrates on seeking the structural differences of cash holdings of corporations in Electronics, Mechanism, Medicine and Real estate industry, and then tries to give a sensible explanation of the differences. The paper first constructs an academic model of cash holdings including seven factors which are corporation size, concentration of equity, debt ratio, debt structure, developing factor, average cash increment of past 5 years and standard deviation of past 5 years' cash increment. After that the model's parameters are estimated with data from Wind system.Regression results show four differences in the industries' cash holding models. Which are (1) debt ratio has a significant positive influence on cash holdings except in Electronics industry;(2) debt structure has no significant influence on cash holdings except in Medicine industry;(3) corporation size has a significant positive influence on cash holdings only in Mechanism industry;(4)equity concentration has a significant influence on cash holdings only in Real estate industry. All these differences are explained in the last chapter of this dissertation.