Equity Balance,Diversification And The Level Of Cash Holdings On The Agricultural Listed Companies

The level of cash holdings as an index to the impact of business strategy and financial management efficiency has been a hotspot in the world.Some scholars study at the influencing factors;some scholars study at the consequences;some of them from the financial condition;some of them take the corporate governance into consideration.But the research from the point of business operating behavior is few,and the specific research to China's agricultural listed Corporation is scarce.Therefore,this paper is based on the trade-off theory and agency theory,tries to study the influence of diversification behavior and the level of cash holdings.At the same time,combined with company's equity balance this governance characteristics,observe the equity balance would enhance the reverse relationship between diversification and the level of cash holdings.And this paper want to through the conclusion to guide listed companies.Because of the agricultural companies' contradiction between high profit and low throughput,and the main business is difficult to become bigger and stronger,more and more agricultural companies try to choose diversification to make higher profit.Therefore this article based on the forty-eight agricultural listed Corporations' 2010-2014 panel data as a sample,first elaborate the theory of the level of cash holdings and the influence factors of it;secondly reviewed the theory of diversification;then explain the theories of equity balance and sum up the related articles;then put forward to the hypothesis,and from two dimensions that if the enterprise choose diversification and what degree the company will choose to analysis the influence on the level of cash holdings.And on the basis of this,adding equity balance variables to explore the relationship between diversification and the level of cash holdings;finally,according to the analysis of descriptive statistics and regression results,verify the hypothesis is correct or not,draw the final conclusion.The theoretical part of this paper is based on normative research,the empirical part adopts descriptive statistics and Econometrics in linear regression and other quantitative methods,the conclusion mainly include:(1)Diversification exists widely in China's agricultural listed Corporations;(2)The diversification and specialization of agricultural management listed Corporation's cash holdings level is different;(3)the agricultural listed Corporations which choose diversification have lower cash holdings;(4)The company has equity balance can optimize the relationship between diversification and the level of cash holding;(5)Age and ownership concentration are positively correlated with cash holdings;(6)Growth,size and financial leverage are negatively correlated with the level of cash holding.In addition,this paper according to the proposed conclusions and make suggestions such as concentrate on the main business,carrying out diversification strategy carefully;optimizing the corporate governance mechanism,strengthen shareholders' equity balance etc.,hoping these suggestions can help the agricultural listed companies choose the reasonable level of cash holdings.