The Impact Factors Of Cash Holdings Of Listed Companies And Its Relationship With The Corporate Value

As the most liquidity asset of all assets in company,cash is not only related to production and business operation activities of the daily life,but also influence the corporate investment,financing and dividend payments and so on which are closely related to the cash holdings of corporate financial behavior.Cash is vital to the survival and development of the enterprise.Due to lack of cash,countless enterprises fall into the financial crisis and will face the risk of bankruptcy.But cash is also the lowest profitability of assets in company,the high opportunity cost as a result of cash is also cannot be ignored,so guarantee cash levels is essential to the normal production and business operation of enterprises.For how to determine the level of cash holdings,the influencing factors of cash holdings,and the effect of cash holdings on firm value,etc.,the domestic and foreign scholars have carried out extensive research,and formed a fruitful research results.Compared with western countries,the research on cash holdings of listed companies in China is still in its primary early stage.Moreover,our market economy has its own characteristics which are adjusted both by the market a nd the national government,but there are also some shortcomings and problems,for example,the capital market development is not balanced,defects in corporate governance mechanism,imperfect legal protection of investors,etc.,Then,it is what that is exactly the factors influencing the choice of cash holdings of listed companies in China?Whether the western theories of cash holdings have explain ability to the cash holdings behavior of listed companies in China?And what is the relationship of cash holdings and the value of the company?All of these problems are waiting for the theoretical analysis and empirical test.This article firstly summarized and empirical researched all results about cash holdings at home and abroad.Then combs the main four theories'that appeared in above results which large influenced to the corporate cash holdings,the four theories' are Keynes's cash holdings motivation theory and agency theory,balance theory and optimal sequence financing theory.and simply discusses the basic features of cash holdings of listed companies in our country in 1999 to 2013.analyzes the cash holdings of the differences between different industries.Through the above of cash holdings theories and empirical aspects of the summary and review.Constructed theoretical basis in this paper,and put forward the hypothesis.On the basis of theoretical research and hypothesis,this article takes our country's a total of 10404 listed companies which are listed from 2007 to 2013 as the research sample.On the basis of research results at home and abroad,the theoretical analysis of influencing factors of cash holdings,including ownership concentration and equity balance degree,on-the-job consumption,agency cost,and so on.Building the corresponding model,using descriptive statistics,correlation analysis and linear regression method of statistics,on the sample data and empirical test,to find a significant impact on different influence factors of the cash holdings.On this basis,according to the sample of the company's cash holdings,and study the relationship between cash holdings and corporate value.In the research on the various factors of cash holdings,this article is taking special cash holdings as the explained variable,explanatory variables of the structure and the uncertainty of the firm.Come to a conclusion:ownership concentration and equity balance degree affects the holdings of cash holdings,cash holdings and ownership concentration and equity balance degree cash holdings are "inverted u-shaped relationship;" On-the-job consumption and agency cost increase will make the company's cash holdings increased accordingly,cash holdings and on-the-job consumption and agency cost significantly positively related;Cash holdings is negatively related to the uncertainty significantly,mainly due to the bankruptcy of listed companies in China is facing less pressure.When uncertainty increases,its cash holdings behavior will be mainly for the short-term profit motive;Cash holdings and significantly positively related to profitability,the greater the profitability,the higher the corporate cash holdings;Cash holdings significantly negative correlation with debt financing ability,the greater the debt financing ability,the lower the corporate cash holdings;Cash holdings and the company size significantly negative correlation,and growth is negative correlation but not significant.When studying the relation between corporate value and cash holdings,based on the value of the company be explained variable,narrow cash holdings as the explained variable,a conclusion can be draw:The value of the company is a non-linear relationship between cash holdings and,When the cash holdings at a low level,and with the increase of cash holdings,the company 's manager will be easy to abuse the power they have for their own desire and trigger the agency problem of free cash Theory,it may cause damage the value of company because of agency costs arise.As the company's cash holdings continued to increase,and it reached at a certain level,at this moment,The level of corporate cash holdings is in protecting the interests of shareholders and reduce the high cost of market financing for lace of funds or any other things,It triggered the trade-off theory and pecking order theory lead to a rise in the value of the company.