A Study On The Impact Of Corporate Governance Structure To Cash Holdings

Corporate cash holdings are very important in a corporation's financial decision-making, not only can the cash holdings amount affect a corporation's daily transaction and operation, but also affect a corporation's other financial decision-making, such as decision-making on investment or dividends distribution and etc. Besides, the cash holdings amount is closely related to the corporate governance structure. This paper is aimed to study the impact of corporate governance structure to cash holdings,and based on the empirical results, I put forward suggestions for strengthening the management on cash holdings by improving the corporate governance structure.In this paper, firstly, I begin from the literature review, and then based on the sample of part of the listed companies in China, I test the impact of corporate governance structure to the cash holdings. The empirical test result is that: ownership concentration, scale of board of directors, and shareholder protection variable are negatively correlated (significant) with cash holding variable, the state-owned share ratio, and plural office variable are positively correlated (significant) with cash holding variable, well the coefficients of A floating share ratio, the managerial ownership ration, ownership of corporation ration and independent director ratio variable to cash holding variable are not significant. Based on the empirical results, we've found some shortcomings on governance structure and cash holdings management among the listed companies of China. Therefore, the listed companies need to further improve the governance structure and cash holdings behavior from the aspect of ownership structure, board structure and management board motivation and regulation.