| In recent years, the investor protection problem has drawn general attention from both the theoretical and practical areas all over the world. The purpose of investors invest in a company is to achieve capital profit,on basis of maintain assets security.If the investors1 interest was infringed and management can use the company's cash and other assets freely to meet the interests, then nobody will be willing to invest for these companies which lack of credit. Therefore, more and more investors will realize that high cash holdings doesn't represent good quality assets of the company. In this paper, combining of the reality of China's capital market, from the perspective of investor protection, explore different regions of China and the legal level of environmental governance of listed companies impact the value of cash holdings.In this paper, it combine the theoretical analysis and empirical analysis. By reviewing lots of domestic and foreign literature, and analyzing relevant basic theory, it sums up investors protection and the value of cash holdings correlated empirical assumptions.Then, according to these assumptions, it takes the empirical design and empirical testing, by analyzing the empirical results, draw conclusions.In the process of empirical research, it constructed 31 regions of investor protection variables in order to test the relationship between the market investor protection and the value of cash holdings. The empirical result shows that the measure of investor protection aspects of the three variables are related to the value of cash holdings correlated, it is the higher the degree of market, the less the degree of government intervention, the higher the level of the legal system, then the better protected the interests of investor. Finally, combining of the above analysis, it is suggested to improve and perfect the system of protection of China's listed companies, in order to protect the interests of investors, reduce agency costs and increase business value. |
