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The Research On Influencing Factors Of Cash Holdings In Chinese Listed Companies

Posted on:2016-02-27Degree:MasterType:Thesis
Country:ChinaCandidate:Y X WangFull Text:PDF
GTID:2309330467975008Subject:Accounting
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Cash is a great asset to the company, the company needs cash meet daily management and investment, so the company should hold enough of cash, but cash is the lowest priority asset in earnings, the company with retained cash will result in a waste of cash, so cash daily management decisions are an important part of the company. If the company wants to make the best decision of cash, it must consider the factors that affect cash holdings. This article is an in-depth research on this issue. The current theories about effects of cash holdings are about transaction cost theory, trade-off theory, pecking order theory and agency theory. These theories perfect the theory system of cash holdings influence factors from the company level, however in the empirical study, different scholar draws different conclusion about the research on the influencing factors of cash holdings, so there is still a need for further research.Based on the summary of achievements of domestic and foreign scholars, we build a static model and a dynamic model respectively to study the influence factors of cash holdings in China from static view and dynamic view, with data from747companies which have listed before December31,2008. Specific results are as follows:(1) From the perspective of the static, in the influence factors of company characteristics level, the cash flow, growth, and cash dividend has a significant positive effect on cash holdings, the company size, financial leverage, cash substitutes, the proportion of bank debt, and debt maturity structure has a significant negative effect on cash holdings. In the influence factors of corporate governance level, the company’s equity ownership concentration degree, state-owned shares, managers, the board size, and the size of the board of supervisors has a significant negative effect on corporate cash holdings. The proportion of independent directors has a positive effect on corporate cash holdings, the company chairman and general manager of the part-time situation has a negative effect on corporate cash holdings, but the both of effects are not significant. (2) From the dynamic perspective, the factors affecting the company cash holdings in the feature level, such cash flow, growth, and cash dividends have significant positive impact on cash holdings, other factors such as financial leverage, cash alternatives, the proportion of bank debt, and debt maturity institutions have negative impact on cash holdings. Factor affecting the level of corporate governance, such as ownership concentration degree has significant negative impact on cash holdings, while other factors are not significant. Also due to hysteresis factor variables significantly the existence of listed companies in China target cash holdings is proved, but because there are adjustment costs, the company’s cash holdings can only partly adjust to the target cash, and the adjusted rate is0.3257.(3) By comparing static and dynamic angles, we can find cash flow, financial leverage, growth, cash substitutes, bank debt, cash dividends, and the degree of centralization of cash equity have statistic stability. The analysis of statistics from the regression coefficients can draw that the company’s cash’ flow, leverage, cash alternatives, bank debt and equity concentration degree has a more significant impact on cash holdings. With the analysis from the company features level and the corporate governance level, we can find the factors of company characteristics level are more important.
Keywords/Search Tags:cash holdings, influencing factors, firm characteristics, corporategovernance
PDF Full Text Request
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