Cash Holding,Industry Competition And Financial Performance

According to modern finance,enterprises need to hold a certain amount of cash to maintain appropriate financial flexibility,so as to cope with the negative impact of environmental uncertainty,which is the key to ensure the expected financial performance of enterprises.According to this logic,the higher the degree of environmental uncertainty faced by enterprises,the higher the cash holding level.For micro enterprises,the level of industry competition is undoubtedly the key factor to determine the certainty of the environment;as a relatively heavy asset industry,manufacturing industry has relatively poor liquidity of assets and relatively difficult to exit,which determines that manufacturing enterprises need to hold more cash to enhance the level of financial flexibility.In view of this,from the perspective of industry competition,this paper explores the cash holding of Listed Companies in China's manufacturing industry.It can not only enrich and develop the theory of financial flexibility,but also provide decision-making reference and intellectual support for the optimization of financial behavior of manufacturing listed companies in China.This paper uses literature analysis,logical reasoning,empirical research and other methods to study the relationship between cash holding,industry competition level and financial performance of manufacturing enterprises in China.Firstly,this paper discusses the research results at home and abroad and the research methods of this paper;secondly,it expounds the concepts of cash holding,industry competition level and financial performance,and combs the relevant theories;then it makes a theoretical analysis of the internal relationship among cash holding,industry competition level and financial performance;then it puts forward research hypotheses and establishes empirical models Finally,the conclusion is drawn and the policy suggestions for the development of China's manufacturing listed companies are put forward.Through the above research,this paper draws the following conclusions:(1)the impact of cash holding level on financial performance has positive and negative effects,but mainly positive effects,so from the overall effect,the cash holding level of enterprises has a significant positive role in promoting financial performance;(2)the level of industry competition can be divided into micro level of enterprise competitive position and meso level of line There are differences in the impact of industry competition intensity on the financial behavior and performance of manufacturing listed companies;(3)the competitive position of enterprises can regulate the relationship between cash holding level and financial performance,and the competitive position of enterprises strengthens the positive correlation between cash holding level and financial performance,which shows that the more advantageous the enterprise is in the competitive position,the better it uses cash assets to improve its financial performance The better the effect of financial performance is;(5)the intensity of industry competition will affect the sensitivity of financial performance to cash holding level,which is reflected in the market plunder effect under the high intensity of industry competition,which will reduce the sensitivity of financial performance to cash holding level.