Research On The Effect Of Monetary Policy On The Lever Of Cash Holding Enterprise

As the micro behavior of enterprises, the Investment behavior, financing behavior and cash holding behavior are studied by a lot of management researchers, while macroeconomic policies are the topics of economics researchers. The former are often limited to the micro characteristic of the enterprises. However, the latter always homogenize the enterprises to the role of "Firms" and don’t take the internal management of the enterprises into account. The "Fracture" phenomenon of the two subjects appears gradually. Recently, more and more scholars notice this phenomenon and start to research by combining the macroeconomic policies and micro behavior of the enterprises. This kind of study soon becomes the hotspots in the interdisciplinary subject of the management and economics. The emergence of a large number of researches is filling the void area. On this background, the paper studies the influence of monetary policy on cash holding behavior of enterprise.On the basis of introducing the classical cash holding theory and reviewing the existing empirical studies, I choose the balanced panel data from 2009Q1-2015Q2 of A-share listed companies to study this topic. I find that the level of cash holding of the enterprises change over the tightness of monetary policy. When the monetary policy is easy, the level of cash holding of the enterprises is high and vice versa. This conclusion contradicts with the conclusions of the existing papers. The existing papers insist that the enterprises will increase the level of cash holding when the monetary policy is tightening on the basis of "Precautionary Motive". To this conclusion, I question its rationality and put forward a more reasonable explanation. In my opinion, the cash holding plays a role of "reservoir". The environment of monetary policy is just a kind of the environments of macro-economy policy. The level of cash holding changes over monetary policy is just like "Defense of reservoir" behavior of the enterprises. This paper also finds the positive relationship between the profitability and cash holding. When the enterprises make more profit, they can save more money. With the help of the saved money, the enterprises can survive the deteriorated profits period. In the end, the level of cash holding also has relationship with enterprise property rights. State-owned enterprises have advantages to borrow more money, and the level of cash holding is low. To the non-state enterprises, because of its disadvantages as well as vulnerability when facing the uncertainty of operating environment, increasing the level of cash holding is a rational choice undoubtedly.