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An Empirical Study Of The Cash Holdings Of Listed Companies In China

Posted on:2013-07-24Degree:MasterType:Thesis
Country:ChinaCandidate:Y W XieFull Text:PDF
GTID:2249330392959506Subject:Accounting
Abstract/Summary:PDF Full Text Request
Cash is a critical financial resource of business, it has great impact in financing,investment, operation and other aspects of business and it is closely related to businessperformance.The trade-off of cash holdings and its influencing factors is an importantcorporate financial behavior, which reflects the company’s financial strategy and meanwhile itis closely related to financial characteristics and governance of a company. Today, the studyon cash holdings and its influencing factors plays an important role in the growth of foreigncompanies. Domestic scholars based their study on factors of the cash holdings of balancetheory, asymmetric information theory, agency theory and other explanations cash holdingsbehavior theory in-depth study. However, because of the particular institutional environmentof China, the influencing factors of the cash holding of listed companies needs acomprehensive theoretical analysis and empirical test.Therefore, on the basis of the empirical literature review of the influencing factors ofcash holdings both home and abroad, the paper makes a thorough research of the relatedtheory. Based on the special institutional background of China’s listed companies, the paperdivides the factors into two major categories: characteristic factors and corporate governancestructures. Using712listed companies in Shenzhen and Shanghai from2008to2010assample data, the paper made a descriptive statistical analysis, multicollinearity test, multiplelinear regression analysis. The main conclusions are as follows:(1) Based on the study of the company’s financial characteristics:①The greater thecash flow, the more cash substitutes, the higher the financial leverage and debt structure, thelower cash holdings.②The more the refinancing activity, the bigger the company, the largerthe dividend payment, the more the cash holdings.(2) Based on the study of corporate governance structure:①the more state-ownedshares, the higher the proportion of ownership and concentration the less the taking of twojobs, the larger the proportion of independent directors, the better the degree of shareholderprotection, the lower the cash holdings;②the more the tradable shares and legal personshares, the greater the size of the board,the more the cash holdings. From the above, we can find that there are still some shortcomings of the financialcharacteristics and governance structure of listed companies in China. Therefore, the paperattempts to put forward some policy suggestions to optimize cash holdings from the aspects oftechnology and system.
Keywords/Search Tags:Cash holdings, influencing factors, the company’s financial characteristics, corporate governance structure
PDF Full Text Request
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