Machinery Listed Company's Cash Holdings And Holding The Value Of Empirical Research

The economists have been studying firms' cash holding behavior since Keynes proposed the Transaction Costs Model in the 1930s. The empirical research for cash holdings wasn't flourishing until the end of the 1990s. In western countries the research about it yielded a rich harvest. For the present, the empirical research about the cash holdings is a new subject in China.Machinery industry is an important mark and vehicle of modernization of the nation's industry as it is a basic industry for national economic development. It is of great practical significance to study cash holding of machinery listed companies of China. This paper investigates the determinants of the cash holdings and the market of cash held by China mechanical listed companies. It tests the model and theory of the cash holdings in accordance with the actual conditions of China, and gives the theoretical support to firm's cash holding decisions.The paper firstly provides an overview of the cash holdings at home and abroad. It builds a theory framework of the determinants of the cash holdings in accordance with the actual conditions of listed companies. In view of two aspects of corporate fundamental factors and corporate governance factors, this paper proposes some hypotheses according to the related theory analysis and builds several regression models. The study uses statistical analysis software called SPSS14.0 and tests a sample of China mechanical listed companies over the period 2004-2006. On this basis, the paper further explores how cash holdings impacts the market value of firms, and analyses the reason for the difference of the research conclusion by contrast with abroad research. In the end, the paper summarizes the empirical research conclusions and gives an outlook for further research.