On The Governance Structure Of Listed Companies In China To Cash Holdings

Being an important theoretical and empirical issue in modern corporate financial management, cash holdings is not only decided by the corporate managers, but also deeply influenced by the corporate governance structure. The aim of this thesis is to investigate the influences of the corporate governance structure on the cash holdings for a sample of Chinese listed companies. According to the results of empirical study, the thesis provides a series of advices about how to improve the corporate governance structure in order to decrease the corporate cash holdings.The structure of this thesis is as follows. Firstly, on the basis of summarizing the conclusions of the correlative studies, I analysis the characters of Chinese listed companies' governance structure after the dual-class equity structure reform. Secondly, I use the agency costs theory and transaction costs model as the basic theories and find out some important governance structure factors that can influence the corporate cash holdings. Thirdly, I build a model with these factors and hypotheses which I put forward before and operate the general regressions. After the empirical analysis with a great number of the date of our sample, I get a series of important empirical conclusions. Fourthly, facing the high level of corporate cash holdings of Chinese listed companies and the problem of insiders control, the thesis proposes some advices to improve our corporate governance structure with the aim of establishing a better cash holdings policy. I expect my advices could offer a different method to deal with the problem of insider control after the dual-class equity structure reform.In the aspect of empirical study, I investigate the influences of different governance structure factors on the cash holdings for a sample of 959 Chinese listed companies which has finished the dual-class equity structure reform at the end of last year. I divide the corporate governance structure factors into two different parts, inside governance structure factors (ownership structure, the ratio of management buyout and the characters of board of directors) and outside governance structure factors (the degree of the investors' benefits protection, the market of corporate control and manager). I use the general regressions to testify the hypothesis with the former factors, and single variable analysis to test the latter factors. Then I compare my results with the conclusions of the correlative studies and explain the possibility of the differences between them.The results reveal that ownership of state and A share have significant negative correlation with the cash holidings, while ownership of corporation, shares concentration and the structures of board of directors have negative correlation with no significance with it. The ratio of management buyout has significant positive correlation with the cash holdings, which means the problem of insiders control of our listed companies may result in high level of corporate cash holdings. The degree of the investors' benefits protection has negative correlation without significant. The market of corporate control has an obvious influence on cash holdings with cooperating the market of manager, but this relationship is not linear. The less I make use of these two markets, the worse we will face the situation of the insiders control and mass cash holdings.Besides, I also bring some holding variables which reflect corporate financial factors into the model. According to the results, the cash holdings has a significant positive correlation with cash dividends, net working capital and debt structure, but a significant negative correlation with the corporate size.