The Value Of Cash Holdings Of Chinese Listed Companies Based On The Financing Constraints

"Cash is king", which has been pursued by many companies at home and abroad, the reason is that the behavior of company’s cash holdings not only reflects its business strategy and financial strategy, but also able to pass the relevant information to investors and creditors, which helps investors, creditors and other stakeholders to make rational economic decisions. Meanwhile, as a developing country, financing constraints widespread in China. It is an issue of concern to investors and creditors that the company held cash is value created or destructed in the face financing constraints.The first part of this article introduces the company’s cash issues related research background and significance, then elaborates literature review and abroad, finally introduces research ideas and content, characteristics and innovation of this paper; The second part defines the concept and theoretical basis. First, this paper defines the concepts of the process used, such as cash, cash value and financing constraints, etc. and then describes the theoretical basis of this study, including the theory of asymmetric information, agency, and free cash flow theory and the pecking order theory; the third and fourth parts are the theoretical analysis and empirical study, based on the status of listed companies held in cash. From the perspective of financing constraints, and using the financial data of listed companies, making some modifications to the study of model predecessors and researching the relationship between the value of financing constraints and holding cash; part of the fifth draws conclusions and makes relevant policy recommendations. The full text follows theory-the status quo-the assumption-Inspection-conclusions and recommendations of research paradigms.Through this study, we have reached the following conclusions:1, through statistical cash holdings of listed companies and found that cash holdings inverted U-shaped, first rise and then decline between2005and2012. A large part of the reason for this phenomenon is that the financial crisis has led to the deterioration of the economic environment during this period of time. In order to ensure the company’s cash flow, and prevent the government introducing a tight monetary policy, the company tends to hold higher levels of cash to cope with changing financing environment.2, The paper made some modifications to FW model, and made empirical studies to the sample data listed companies of2010-2012, which found that the value of cash holdings of listed companies in China is only0.250yuan, while the value of American and European countries in general in one yuan, which explained the efficient use of cash value of China’s listed companies held is very low, serious waste and serious agency problems about cash management process.3, the paper selected four indicators to measure financing constraints, which return the sample data packet,the results showed that:the cash value of the company’s lower dividend payout ratio is higher than the high dividend payout ratio of the company; non-cash value of state-owned companies is higher than the state-owned companies; small cash value greater than massive companies; a lowe degree of financial market regional companies had higher cash value than higher degree of financial market regional companies. Studies have shown that greater efficiency in the use of holding cash under the financing constraints and financing constraints increases the value of cash holdings.