Cash Holdings Of Listed Companies The Level Of Impact On Investment Behavior

Cash holdings is an important area of corporate financial management , not only because of cash assets' the double features of both high liquidity and low profitability ,but also the level of cash holdings reflects the company's integrated financial strategy and company management of the situation. At the same time, cash holdings as an important means of internal financing, closely related to investment behavior. That enterprises should hold how much cash to make the total cash cost of holding and loss of investment opportunities to be lowest must be considered as a problem by the enterprise management. This paper aims to study the different investment behavior of different levels of cash holding companies , as well as differences in the investment efficiency. First,it introduces theoretical basis for cash holding research and detailed analyses the impact of cash holding by the characteristics of the financial and governance characteristics as well as the connection between cash holdings and investment behavior. Then, it analyses the status quo of the listed companies in cash holding on the whole, including the industry characteristics and timing characteristics ,at last ,it compare the level of cash holdings of Chinese company with the international level in other countries.The core of the paper is the use of empirical methods for analysis of the influence of the level of cash holdings on investment. First of all, it measures the target level of cash holdings, and use the difference between the actual level of cash holdings and the target level as the scale to divide all samples into the high cash holdings and low Cash holding companys. Then, it empirically analyses the different levels of cash holding company that have different investment spending,making the business performance as a standard for the testing investment efficiency. The empirical results show that: the actual level of cash holding of listed companies in our country is higher than the target level; companies with different cash holding levels have different investment spending, appearing a negative correlateion relationship; lower cash holdings companys used the cash for investment expenditure, and the use of the funds is efficient with the performance as a testing stander. the expenditure will help to enhance the business performance, while the performances of high cash holding companys are relatively low.