Empirical Study On The Monopoly Of State-owned Corporate Cash Holdings

At present, most of the state-owned enterprises profit comes from the stateowned monopoly, however, due to its special monopoly status, the monopoly role of market allocation of resources has been reduced, and therefore relative to competitive industry, monopoly industry enterprises have their special characteristics. This paper studies the level of monopoly industry’s cash holdings. In the study, we counted the monopoly industry’s and competitive industry’s level of cash holdings range from 2009 to 2013 respectively, analysising their cash holdings descriptive statistics, and the difference between the level of cash holdings in two different types of industry. Then we use its empirical analysis to identify the key factors affecting the level of cash holdings of monopoly industry, and compare them with the competition industry. Our study found that though the cash flow of monopoly industry is rich, with less profit given to the state and less dividends paid to investors, it still keeps a low level of cash holdings. Relative to competitive industries, monopolistic stateowned enterprises has a lower level of cash holdings. In recent years, especially since from 2010, the effect the national regulatory measures to the monopoly industry is obvious, and its cash holdings declines more rapidly. The descriptive statistics of this paper also found that relative to the competitive industry, the monopoly industry not only keeps a lower level of cash holdings, but also shows smaller differences between industries, and companies are more willing to maintain a similar level of cash holdings with other companies within the industry.