The Empirical Study On The Influence Of Diversification And Management Power On The Cash Holding Value

Enterprises are profit-making organizations engaged in economic activities such as production,circulation and service,and obtain strategic competitiveness by selecting and implementing strategies to create value to achieve excess profits.With the rapid development of the global economy and science and technology,the competition in many industries has changed in essence.The global diffusion of technology and the development of breakthrough technology have led to the homogenization of products and the opening of new markets for innovative enterprises.In order to pursue the stability of enterprise survival,in order to explore the new business direction of the enterprise,the implementation of diversification strategy seems to be an inevitable choice in the process of enterprise development.As an important factor of sustainable development,cash holding is of great significance to the survival and continuance of enterprises.Therefore,the research on diversification strategy and cash holding value deserves our attention.At the same time,due to the defects existing in the current market development in our country and enterprises corporate governance system is not perfect,the size of the management power of diversified enterprise resource allocation efficiency of internal capital markets and the cash value,has the important influence.Therefore,considering the size of management power,it is of great significance to consider the change of cash holding value effect of diversified enterprises.This paper is based on the motivation theory,trade-off theory and the analysis of the theory of agency theory and so on,and theoretically discusses how the diversification,management authority impact on the cash holding value.This paper selects six years from 2011 to 2016,non-financial listed companies,a total of 13234 samples,using descriptive statistics analysis and multivariate linear regression model analysis of empirical research method in order to estimate the change of cash holding value from the point of view of diversified,and discusses the impact of diversification on cash holding value under different levels of management power.Finally,this paper uses a variety of tests to check the impact of robustness.The empirical result shows that diversification of Listed Companies in China is more common,but overall the level of diversification is low.Under the same condition,the level of cash holdings of diversified enterprises is lower than that of specialized enterprises.At the same time,diversification has a negative effect on the value of corporate cash holdings,and this negative effect is more significant in the group with lower management power.This paper combines institutional background of China's marketization process,examines how diversification influence the cash holdings value,enriches the empirical study on the value effects of diversified business and cash holdings,further research the relationship between diversified management and the value of the enterprises' cash holdings under the power of different management,and provides policy Suggestions for the strategic choice of Chinese enterprises in the context of the current complex economic environment.