Research On Cash Holding Factors And Holding Performance Of High - Tech Listed Companies

Cash is one of the most important asset of company, which decide the viability of the enterprise, reflect the characteristics of business management, and influence the performance and value of the company as well. Based on the classic theories, empirical researches about cash holdings mainly involve two fields, the determinants of cash holdings and the value effect of cash holdings, there actually developed abundant but different conclusions. Recently, the high-tech companies in our country present great development situation. The characters of intensive knowledge and technology, high investment and risk, make high-tech companies a very special type of enterprise. Meanwhile, the researches about the cash holdings of high-tech companies are rarely seen, and there is a lack of empirical analysis from different aspects. Thus, it’s very meaningful to study the cash holdings behavior of high-tech companies both in theory and practice. The research achievements can also support the improvement of the high-tech companies’ future development, their cash management, performance and enterprise value.This paper takes 324 certificated, screened and representative Chinese listed high-tech companies which are A-shares of both Shanghai and Shenzhen stock markets as the object of the study. With the research of existing theories and literatures, using the related panel data of 2010 to 2013, designing the variables and models, by the method of multivariable linear regression, this paper discusses the factors of high-tech listed companies’ cash holdings, studies the effect of cash to high-tech listed company’s business performance and capital market value, and pays attention to the high-tech listed companies’ cash holdings capacity on practical cash demand.The research finds that the cash holdings level of the high-tech listed companies in our country is influenced significantly by the factors of lever, debt structure, growth, ownership concentration, level of managerial share ownership and financing constraints. The conclusions indicate that cash holdings show no significant positive effect of high-tech companies in the dimension of performance measured by cash, performance measured by profit, investor return and market expectation. The study also present that the cash holdings level of the high-tech listed companies in our country differ greatly with their practical cash demand while the gap between them being larger, which infer the cash holdings capacity on practical cash demand is not good enough overall. In this situation, with the fact that many kinds of factors on aspect of enterprise characteristics, internal governance and external financing ability affect the high-tech listed companies’ behavior of cash holdings and performance of cash holdings, the study conclusions indicate the necessary improvement of the capital market, related institution and macro business environment in China. The research also infer that the Chinese high-tech companies should make related adjustments according to their own characteristics, promote the scientific and efficient use and management of cash to improve enterprise performance and value. In this way, the Chinese high-tech companies can make great development in the future.