The Correlation Research On The Relationship Between Ownership Structure And Abnormal Cash Holding

Financial management behavior of modern enterprise is an important issue of cash holdings,cash holdings is not only related to the daily production and business activities, but also other aspects of business,such as the business' investment decisions, financing decisions and dividend policy.However, if holding the excess cash, the company will be redundant or shortage of cash.which is disadvantageous for the development of the company. As cash flow and is in the reverse relationship with profitability, if holding too much cash,the company would result in excessive burden of the opportunity cost on enterprises.On the other hand, if the company holds too little cash, May be the company will be suffered loss because of the shortage of cash.But excess cash holdings on the modern enterprise is a very common phenomenon. The company's ownership structure is a very important factor in corporate governance. Ownership structure reflects the the motivation and ability of the shareholders can monitor and control manager. Ownership structure can fundamentally affect the shareholders to play a regulatory role, which can influence the manager to do the decision on how much cash holdings, if the shareholders monitoring manager properly, and checks and balances, then the excess cash holdings phenomenon will be greatly improved. Therefore, this article hopes to find the relationship between ownership structure and excess cash holdings, by improving the ownership structure of listed companies to enhance the management of corporate cash holdings, making the company's cash holdings tend to normal it willbenefit to the company's long-term development.Based on this, first,this paper reviews the literature at home and abroad.Second, the paper writes the theory to interpretate the relationship of ownership structure and the excess cash holdings.The theory is agency theory and asymmetric information theory. Finally, put forward the hypotheses.Then using the data of A-share in 2007-2009 on listed companies in China as the research object.Firstly referencing the methold which constructing the factors of the cash holdings to calculate the excess cash holdings as opler et al. (1999) do.Secondly, using the excess cash holdings as the dependent variables and ownership structure as the explanatory variables Through multiple regression analysis, empirical analysis the the impact of excess cash holdings of nature of equity, equity ownership concentration and checks and balances.The results show that:First, the proportion of managerial ownership in China is relatively low, because the interests of managers and shareholders are not consistent, they may moral hazard and adverse selection to hold the excess cash holdings for their own interests. Second, the state-owned shareholders gradually realized the importance to participate in corporate governance and then pay more attention on the corporate's cash holdings.It will have the use of supervising and restricting the excess cash holdings.Third, the major shareholder of the corporate shares of listed companies is likely to be the ture insider, they through holding the excess cash, to obtain their own interests through occupying the interests of minority shareholders.Fourth, the proportion of the total outstanding shares of greatly increased.Many tradable shares by way of voting with their feet to express their dissatisfaction, excess cash on the behavior of managers have a certain inhibitory effect. Fifth, the large shareholders do not monitor managers effectively, but they conspire together, or with the managers to carve up the company's assets, which infringes on the interests of small shareholders.Six, the former two to the top five largest shareholders of the shareholders did not play a supervisory role, but conspiring the largest shareholder, embezzling company's property and interests of minority shareholders by holding much cash holdings, and the company will hold the excess cash..