Impact Of Corporate Governance On Cash Holdings

Cash holdings strategy as an important financial decisions of modern enterprise, it not only affects the enterprise’s daily operating, investment and financing activities, also affects the other management decisions of the enterprise. Corporate cash holdings not only directly decided by the company managers, but also indirectly affected by the corporate governance structure. As a starting point, this paper selected the financial and governance data of our country’s listed companies from2008to2012as research samples, empirical research on the governance structure of listed companies in Chinese enterprises impact on cash holdings.First of all, this article analyses and classifies the literature of cash holdings. The domestic and foreign literature can be divided into three categories:the theory research of cash holdings, the financial characteristics influence the cash holdings, the corporate governance structure characteristics influence the cash holdings. It points out the deficiencies and merits of those literatures. Secondly, this article describes Agency theory and Transaction Costs Model in details. And describe the governance structure of the listed corporate in our country, after the split-share structure reform. On the basis this, we detailed analysis the equity ownership structure, board structure, manager’s shareholding and equity protection degree influence on cash holdings, and proposed the corresponding research hypothesis. Again, this paper builds the multiple regression model study the corporate governance structure impact the cash holdings, and test the research hypothesis we put forward before, then we find the governance structure of listed companies in China still exist some disadvantages, so as to make the cash holdings of listed companies in our country remains at a high level. Finally, according to the empirical conclusions, in order to perfect the governance structure of listed companies in our country, we put forward relevant policy Suggestions for regulating the behavior of cash holdings, and put forward the idea for later research.