Research On The Influence Of Allocation Of Control Rights In Companies Listed On GEM On Excess Cash Holdings

As the most liquid assets of a company,cash not only supports the company's daily production and operation,avoids falling into financial difficulties,but also enables managers to quickly seize good investment opportunities.But cash is also more vulnerable to encroachment because of its strong liquidity.Excess cash holding is such a way of encroachment on cash flow.It refers to the actual cash holding level and normal level of a company.The degree of deviation between cash holdings includes cash redundancy and cash shortage.Holding too little cash will bring opportunity cost.Holding too much cash will easily lead to over-investment.Both of them will bring about bad returns and lower company value.In recent years,the GEM market has played a key role in China's capital market with the characteristics of "two high and one new" and is closer to the development cdirection of social productivity.However,there are many problems in its development process,such as inadequate governance mechanism and more prominent agency problems,which lead to the frequent occurrence of excess cash holding anomalies,thus affecting the stable development of the company.In order to solve the problem of excess cash holdings,we need to find the answer from its source.The root of excess cash holdings is agency problem.It is a kind of embezzlement tool for managers and large shareholders to pursue private bernefits.It can reflect the efficiency of corporate governance more objectively.Establishing a good corporate governance mechanism can regulate the behavior of managers and large shareholders,reduce internal agency conflicts through a series of effective institutional arrangements on the allocation of corporate control rights,improve the problem of excess cash holdings,and then improve the value of cash holdings,and enhance the efficiency of the company.Then,how can the allocation of control rights ensure the efficiency of cash holding decision-making of GEM listed companies?From the perspective of principal-agent relationship,this paper explores the allocation of control rights from the perspective of shareholders,board of directors and managers,and integrates the three levels of control structure.A comprehensive allocation model of control rights is proposed,which combines qualitative and quantitative research methods,normative and empirical research methods.This paper investigates the influence mechanism of the control right allocation structure of listed companies on the GEM on excess cash holdings.Firstly,this paper defines the concept of the main variable,combs the relevant theoretical basis,summarizes the relevant literature on the allocation of control rights and excess cash holdings at home and abroad,and finds the entry point from previous studies.At the same time,referring to previous scholars'research on the allocation of control rights,this paper puts forward three-level division of control rights,carries out in-depth theoretical analysis and puts forward research.Secondly,based on the previous theoretical analysis,this paper chooses the GEM listed companies from 2014 to 2017 as the research obj ect,and carries out an empirical test with 2014 data.The empirical results show that the first largest shareholder's share-holding ratio has an inverted "U" relationship with excess cash holdings,and that the proportion of large shareholders and managers in the board of directors is positively correlated with excess cash holdings.The proportion of directors helps to reduce excess cash holdings;the general managers appointed by major shareholders will reduce excess cash holdings;the relationship between the general managers'shareholdings and excess cash holdings is significantly inverted U-shaped;further research shows that the excess cash holdings corresponding to the control allocation pattern prevalent in GEM listed companies are not the lowest,and the structure of corporate control is still in existence.Finally,combined with the empirical test results and the actual situation of the GEM market in China,the paper gives some suggestions from the three dimensions of control rights,aiming at optimizing the allocation structure of control rights of listed companies on the GEM and improving the rationality of cash holdings.