Research On Financing Constraints And The Behavior Of Cash Held By The Listed Companies

Because of the existence of information asymmetric, agency problems and other factors, listed companies are generally facing serious financing constrains. On the basis of organizing literatures, the article select the date of China’s listed companies which were listing in Shanghai and Shenzhen A-share from2008-2011.Through constructing an index which can reflect financial constraints synthetically, adding the index which can reflect the degree of separation of controlling shareholders’control and cash flow rights, and a proxy of investor protection, the article would research financial constraints and the listed companies’behavior of cash holding.The overall accuracy of the index which is constructed by logistic method is90.9%. It can well reflect the status of the companies’financing constraints to some extent. At the meantime, the degree of financing constraints of non-state enterprises is obviously higher than that of state-owned enterprises. When we add the index of the degree of separation of controlling shareholders’control and cash flow rights, we find the relationship between the index and the listed companies’cash holdings is not sure. In order to explain this phenomenon, we analyze private enterprises in detailed. In addition, in the high degree of financing constraints of listed companies, investor protection can inhibit controlling shareholders’behavior of expropriating the interests of minority shareholders, but do not play a significant role in all samples. What’s more, investor protection can reduce the degree of listed companies’financing constraints, and then reduce the companies’cash-cash flow sensitivity.Finally, according to the results above, we put forward some proposals to listed companies and the government. First, the listed companies should strengthen the information disclosure to reduce the degree of information asymmetry with persons who provide money. Second, listed companies should change the phenomenon of a large shareholder who controls the company completely, and format mechanism to suppress the controlling shareholders’behavior. Finally, the government should improve the legal system, strengthen the efficiency of enforcing the law, and protect the interests of minority shareholders and the investors.