Analysis On The Determinants And Value Effect Of The Corporate Cash Holdings In China

This dissertation focuses on the determinants and value effect of the corporate cash holdings in China, with listed corperates as its subjects. We follow the logic roads from the determinants of decisions to the performance of decisions, from the macroeconomic factors to the microeconomic factors, and from the classical enterprise pattern to the modern corporate pattern.First we make a cross-study on the actuality of Chinese listed coproates cash holdings.Through two latitudes of cash holdings level and the cross-sectional variance of coporate cash holdings ,we know: In China,the mean and the median of the listed corporates' cash-to-asset ratio are 15.76% and 12.62% respectively, which is higher than the level of the world ,even higher than the level of the countries where shareholders rights are not well protected; there is apparent difference in the cross-variance of corporate cash holdings for different industries, thereinto, the behaviors of corporates cash holdings in the information technology industry are most diverse,and the opposition the real estate industry is.Second, Using an one-period cash-buffer model and a simple model that create a trade-off between current and future investments, we analyse the impact of macroeconomic uncertainty on cash holdings for Non-Financial Firms. Then,we test the empirical implications of two model ,and the result sustain both conclusions .Additionally,we research on the relationship between the business cycle and the corporate cash holdings according to three models:the trade-off model,the agency costs of managerial discretion theory, and the pecking order theory,the empirical examination shows that the relation is not so explicit.After the analysis on macroeconomic level ,we take an ulterior step to explore the microdeterminants of corporate cash holdings under the assumption that managers act at shareholders' benefits.Using a three-period investment-and-financing model, we reach the conlusions: the cash flow sensitivity of cash holdings is always positive for financial constraint corporates , and for constraint corporates applying hedge instruments, their cash flow sensitivity of cash holdings is lower than those who do not. The financial unconstraint corporates have no clear relationship between cash holdings and cash flow. The empirical examination shows: The financial constraint corporates do have a positive sensitivity, and the unconstraint corporates also follow suite, although the sensitivity coefficient is higher for the financial constraint corporates.We suppose that the results above are due to serious agency problem for the financial unconstraint corporates.We attempt to measure the hedging ability, and find: some weak evidences support that high hedging ability firms have a low cash flow sensitivity.In sucession, we put forward to analyse the impact of agency problem on the cash holdings for non-financial firms.We argue that corporates with high managerial agency conflict and low governance efficience differ in preferences for cash holdings under the heterogeneous environments, in addition, we analyse the corporate motive base of the different preference for cash holdings .through testing the relationship between the corporate governance mechanism,the protection of shareholders rights and the corporate cash holdings, we find: In China , corporates with high agency problem show preference for high cash holdings , therefore we consider that the main reason is: managers are inclined to conservative financial polices, not to evade discipline from outside governance mechanisms. A contribution to existing literatures is that we set up two score-index systems to measure the corporate governance efficience and the protection degree of shareholders rights.In the end, we investigate the value effect of cash holdings for Chinese listed corporates.The evidence proves there are negative achievement effects on the corporates to have cash holdings, and the value of 1 yuan RMB cash holdings lies between 0.3451 yuan RMB and 0.6726yuan RMB, for the mean value, it is around 0.5089 yuan RMB , much lower than the value of cash holdings of corporates in developed countries .