The Relationship Between Ownership Concentration And Cash Holdings Of Listed Companies

At present,the characteristics of ownership structure of listed companies in china is that ownership distribution is highly centralized,the widely existence of controlling shareholders is already a indisputable fact, so the study of controlling shareholders’ function and expression in corporate governance becomes a hotspot of studies of corporate governance gradually in recent years. Because cash holdings is affected by corporate governance and controlling shareholders’function in corporate governance is increasingly important,we try to study that controlling shareholders’expression in corporate governance is how to affect cash holdings in this paper.As studies of corporate governance constantly go deeper,people bright product market pomtition,a exterior governance factor, into studies of corporate governance,and discover that product market competition can affect the effect of corporate governance.When the degree of market competition is different,controlling shareholders’expression in corporate governance is different,so that cash holdings is affected differently.In different conditions of product market competition,we studied the relationship between ownership concentration and cash holdings in this paper. First of all,we reviewed and arranged the domestic and foreign studies on determinants of cash holdings;Secondly,we introduced the related theories of corporate governance and cash holdings,analysed that the product market competition was how to affect controlling shareholders’expression in corporate governance and cash holdings,and made assumptions based on the analyses.After that,we built a multiple linear regression model in accordance with the related theoretical analyses and research hypotheses;Finally, the product market was divided into highly competitive product market and less competitive product market by standardizing on industry average CROA,and the2007A-share listed companies in Shenzhen and Shanghai based on the industry were classified into two different competitive markets,then we studied the relationship between ownership concentration and cash holdings by analysing the two groups of data respectively.The research conclusions show that:in highly competitiveproduct market, controlling shareholders mainly display supervisory role,the relationship between ownership concentration and cash holdings is striking negative correlation;in less competitive product market,controllingshareholders mainly display embezzlement,the relationship between ownership concentration and cash holdings is striking positive correlation.