Research On The Impact Of Cash Holding?Inefficient Investment And Cost Stickness

In recent years,the number of Listed Companies in China has been increasing,and the domestic market competition has become more and more fierce.All listed companies are focusing on cost saving,productivity improvement,profit increase,play their advantages and enhance their competitiveness in order to occupy more market share.Listed companies have the strongest cash liquidity.How to use these cash to maximize cash turnover efficiency and minimize production costs has become the focus of the company.By investing the cash held by the company efficiently,managers want to earn more than the normal profits of the company.However,due to various factors such as policy system,financing constraints,information asymmetry and so on,some managers of listed companies will make inefficient investment in cash holdings,and inefficient investment makes the cost change irregularly and difficult to control with the change of sales volume,thus forming cost stickiness.Thus,cash holdings can affect Cost Stickiness through inefficient investment,in which inefficient investment plays an intermediary role.At present,there is no research literature on the relationship between cash holdings and Cost Stickiness and inefficient investment.Therefore,the research on the relationship between cash holdings and Cost Stickiness and inefficient investment has important theoretical and practical significance.Firstly,the paper combs the literature about cash holding,inefficient investment and Cost Stickiness at home and abroad.Based on agency theory,information asymmetry theory,cash holding theory and classical economics investment theory,descriptive statistical analysis,correlation analysis,regression analysis and robustness test are used to analyze the manufacturing industry of domestic listed companies.The problem of cost stickiness is analyzed and verified.Based on the data collected from 3,531 manufacturing enterprises in Shanghai and Shenzhen Stock Exchange from 2012 to 2017,this paper uses Excel and other related software to process these data,and conducts an empirical analysis using statal5.0.The empirical results show that cash holding has a positive effect on cost stickiness,and the two have a significant positive correlation:cash holding has a positive effect on inefficient investment;inefficient investment and cost stickiness.The change direction is the same,showing a significant positive correlation,and the intermediary effect test principle is used to confirm the intermediary role of inefficient investment between cash holding and cost stickiness.Finally,through empirical results,the corresponding policy recommendations are put forward.While the government strives to improve the macroeconomic environment and market economy,enterprises should establish a sound cash budget management to determine the best cash.Holding scale,avoiding ineffective investment behavior,improving investment efficiency and reducing the impact of cost stickiness,I hope to provide some guiding suggestions for enterprises in cost management and cash management.