An Empirical Research On The Effect Of China's Listed Companies' Ownership Characteristics On Cash Holding Level

While the company holds cash can save transaction costs of external funds, not for day-to-day cash payment of the liquidate assets, and meet company profitable investment and pay for unexpected payments, but will reduce corporate earnings and increase the agency costs. How much cash the companies holding decide the demand or pay of the cash. Therefore, the level of corporate cash holdings is an important decision in the company. A large number of foreign literatures had tested the cash holding level not only was affected by finance behavior but also is connected with ownership characteristics.On the basis of abroad existing achievements, and combined with the specific conditions of our country, the paper investigates the empirical determinants of corporate cash holding level for a sample of 619 firms public trade in China stock during the 2001-2005 periord. the paper empirical research the impact on the cash holding level of ownership concentration, outside blockholders, proportion of State share, proportion of Legal person share, proportion of the managerial ownership and proportion of A floating share. The result shows that a separate study of the ownership characteristics on the cash holding level impact is the result of ownership characteristics basically have not affected on cash holding level. Because a large number of foreign literature had confirmed the ownership characteristics is have a definite impact on the cash holding level. So, such a conclusion may not be satisfactory. In considering the financial characteristics of factors on the impact of the findings of the study, we find that, Legal person share is negatively related to cash holding level, and the proportion of A floating share and proportion of the managerial ownership is positively related to cash holding level. But concentrate of the ownership, outside blockholders and proportion of State share don't have a significant relation with cash holding level. So the paper has a view that the ownership characteristics of China's listed companies have partly effected the cash holding level.The paper has also results that firm size, cash flow ratio, cash alternatives and bank debt is negatively related to cash holding level, and the companies'growth is positively related to cash holding level.At the final part of this paper, we integrated our case study and the reality of the listed companies in China to tentatively propose some suggestions on improves ownership characteristics and the external market environment.