| Cash is the lifeblood of the corporate operation.Cash holding policy is a vital important part of company’s financial decision.The previous research about influencing factors of corporate cash holding have experienced a process from the company’s own characteristics and corporate governance level to the macroeconomic environment.However,the recent literatures mainly exploring the relationship between cash holdings and financial markets,investors legal protection,monetary policy,ignoring another important part of the macroeconomic environment: bank system reform.Using the data of Chinese A-share listed companies from 2005 to 2015 as samples,we find robust evidences that bank system reform is negatively relevant to the level of corporate cash holdings.The negative relationship is more significant in private corporate and the area of high bank competition and financial development.In order to explain this phenomenon,we base on the perspective of cash holdings’ value and found that the bank system reform reduce the level of corporate cash holdings by easing financing constraints all-roundly.Considering the nature of property right,bank system reform reduce the level of cash holdings mainly through alleviating financing constraints in private enterprises and inhibiting agent conflict in state-owned enterprises.Echo mentioned above,this negatively relevant relationship is more significant in the area of high bank’s competition and financial development.In addition,we also found that the negative relationship between foreign bank entry and the level of cash holdings is more significant in large corporations.However,the level of financial development and the degree of bank competition weakened the effect of corporate size on the negative correlation between foreign bank entry and the level of cash holdings,which indicates that they restrain the “cherry picking” effect.This paper not only supplements the relevant researches of cash holdings,but also sheds light on the effect of bank system reform.This paper’s contributions are mainly embodied in the following respects: firstly,bank system reform affects the financing constraints and agent conflicts by introducing private property rights and increasing financing facility.Secondly,bank system reform relieves the Chinese corporations,especially private corporations financing constraint,we should continue to promote the bank system reform.Thirdly,in terms of different property rights’ nature,the mechanism of the bank system reform is different,therefore,the government shouldn’t apply a one-size-fits-all approach.Fourthly,the government need to optimize the financial ecological environment and reduce the degree of bank monopoly,provide better external conditions.Finally,foreign banks entry not only broaden the financing channels but also introduce competitive mechanism,ease financing constraints of private enterprise and optimize the financial resource allocation efficiency.However,due to the existence of information asymmetry,foreign banks prefer large corporations,the deepening of financial development and bank competition can alleviate this problem and prompts bank departments paying more attention to the small enterprise.From this perspective,the government also needs to optimize the environment of financial development and reduce the degree of bank monopoly to provide better macro environment for foreign banks. |
