| Cash is an important strategic resource of company,known as the "blood" of enterprises,closely related to the company's healthy operation and sustainable development.At the same time,cash is the most liquid and most likely to be abused by the agents seek personal assets.When the information environment of the company is not transparent,lack of effective supervision,information asymmetry and agency problems will make the "value creation" of the value of the cash to be destroyed".As the capital market intermediaries,the analyst plays the role of an independent third party,and also plays an important role in improving the information environment between investors and company.The analyst is a part of the company's external governance mechanisms.This determines that analysts' coverage has an important impact on the company's cash holdings.From the perspective of the role played by analysts,on the one hand,analysts can improve the information content of the capital market and promote the internal and external information tends to be consistent by issuing the forecast report.At the same time,they are some initial financial fraud discoverer in recent years,to play the role of a supervisor.On the other hand,the analyst may be for a variety of interests to release biased report because that the associations between listed companies and analyst also affects the independence of them,the analyst faces the more and more serious crisis of confidence.So,what role does the analyst play in the capital market,and how does it affect the value of the company's cash holdings? By what mechanism? This is of great significance to further standardize the behavior of analysts,improve capital allocation efficiency and protect investors.First,this paper first reviews the domestic and foreign literature about analysts and corporate cash holdings.And based on the efficient market theory,agency theory,information asymmetry theory,and the free cash flow theory,we put forward the supervision mechanism and catering mechanism and propose the research hypotheses and construct the research model.Then select the A shares of Listed Companies in the 2002-2014 annual data,we use the number of analysts who publish earnings forecast report,as well as the analyst's residual attention as an alternative variable of the analysts coverage,considering heterogeneity of analysts,subdivided the analyst into release cash flow analyst and analysts from the underwriter,studies the impact of analyst's coverage on the value of cash holdings,tests the supervision mechanism and the catering mechanism.Then,further tests the influence path between analysts coverage and cash value.Finally,we use the tool variable and 2SLS to test the robustness.Empirical results show that:(1)Analysts coverage has a positive impact on the value of the company's cash holdings,mainly through the supervision mechanism.(2)The analyst who also release cash flow forecasts can significantly enhance the supervision effect,in other words,can enhance the positive relationship between analyst coverage and the value of the company's cash holdings.(3)The underwriter's analyst will significantly reduce the positive correlation between the analyst coverage and the value of the company's cash holdings,verifing the impact of the catering mechanism.To sum up,there is not only the function of the supervision mechanism but also the catering mechanism,but on the whole,the supervisory function plays a leading role.(4)By inhibiting the excessive investment of free cash flow,analysts coverage can improve the efficiency of capital allocation,so as to enhance the value of cash holdings.These results expand the research of analysts coverage and cash value's economic consequences,then reveals the influence path between them.These results indicate that:(1)We should further standardize the behavior of securities analysts,improve the comprehensive quality,assurance the independence of analysts;(2)Improve the information disclosure system and the corporate governance of listed company. |
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