Research On The Impact Of The Bank-enterprise Relationship On Company Cash Holdings

First of all, this paper reviews related literatures and theories aboutbank-enterprise relationship and cash holdings. Then, from four perspectives asdifferent monetary policy background, industry differences, regional differences offinancial marketization, differences in the nature of ownership, by rigorous logicalanalysis, the paper put forward a series of theoretical hypotheses by mathematicalinduction. Based on empirical study on A-share listed companies in Shanghai andShenzhen covering the period of2001—2011as a data sample, Through positiveanalysis we have arrived at the following conclusions.With different monetary policy context, the relationship between bank-enterpriserelationship and corporate cash holdings vary by industry. Under contractionarymonetary policy, for listed companies in the real estate industry, bank-enterpriserelationship significantly and positively correlated cash holdings. But for listedmanufacturing companies&the sample group of all listed companies,bank-enterprise relationship significantly and negatively correlated cash holdings.Under easing monetary policy, for listed companies in the real estate industry,bank-enterprise relationship significantly and negatively correlated cash holdings. Forlisted manufacturing companies&the sample group of all listed companies,bank-enterprise relationship still significantly and negatively correlated cashholdings.From the perspective of degree of financial industry marketization, in the regionwith hight degree of marketization of financial industry, bank-enterprise relationshipand cash holdings have significant positive correlation relationship. But in the regionwith low degree of marketization of financial industry, bank-enterprise relationshipand cash holdings show no significant correlation.From the perspective of differences in the nature of ownership, there is not adifference between state-owned enterprises and private enterprises. That is, regardlessof the state-owned enterprises or private enterprises, bank-enterprise relationship and cash holdings both show a significant negative correlation.In addition, this study also shows that, compared with other cash holdings theory,cash holdings financial pecking order theory has a strong explanatory power in ourcountry.