The Analysis Of The Impact Mechanism Of Cash In The Chinese Listed Companies On Market Share

Companies keep a low ratio of cash holdings only for supporting routine expense. Cash-rich companies may be doubted by investors about their operation decisions. Th us, companies tend to squeeze their cash on hand to show that they are in thegood ope ration. However, the lattest researches suggest that cash holdings have positive impact on market share growth. This means companies should improve the ratio ofcash on h and.The main content of researches in this paper includes the overall analysis of the impact of cash on market share growth, the analysis of the impact of cash on market share growth under acquisition, as well as the analysis of the impact of cash on market share growth when tariff goes down. The models are established based on Campbello’s baseline model and pecking order theory and other early researchers’ theories. This paper uses A-share listed stocks as a samples and utilizes dynamic panel datato establish regressions. this paper has explained how cash holdin gs ’affect a frim and its rivals’ competitive behavior and that, in turn, may affect marke t share growth.The research suggests that cash holdings have positive impact on companies’ market share growth and bring them profits. Thus, it is good for companies to enhance their raito of cash holdings.