Research On The Value Of Cash Holding For Chinese Listed Companies Based On The Investment Opportunity Set

Any enterprise are inseparable from cash, because it is the negotiability strongest assets and themost important resources for the enterprise, and improper management of cash will cause seriousinfluence to enterprises. On the basis of the domestic and foreign research results, this paper combsthe major cash holdings theories of the listed company, analyses the cash holding status anddevelopment trend of our listed companies and in recent years, measuring the growth of listedcompanies in China by using the investment opportunity set index and calculating the investmentopportunity set comprehensive score of listed companies in China through factor analysis. At the sametime, it studies the influence of investment opportunity set to the cash holding value of the listedcompanies by constructing a panel data model and further groups the listed company with thedifferent investment opportunity set to specifically analyses the difference of the cash holding valuesbecause of the different investment opportunity set.This paper shows that, as whole, the value of cash holding is negative, which indicates that themanagement of cash exists agency cost. After the introduction of the interactive item of investmentopportunity set and the cash holdings, the result shows that the cash holding value of the listedcompany is different from each other because of the different IOS, the value of cash holdings in thegrowth company is obviously higher than that of no growth company. With further grouped in highand low growth sample, it shows that the cash holding value in different growth companies isobviously different. For high growth companies, one dollar can obtain much more; for low growthcompany, the increase of the cash holding may reduce the rights and interests of the shareholders. Thispaper estimates that IOS has significant impact on the value of cash holding, and enterprises shouldgive full consideration to the growth stage in making cash management policy, using the investmentopportunity reasonably and effectively, giving full play to the value creation role of cash so as torealize the enterprise value maximization.