The Impact Of Industry Growth On Chinese Listed Company's Cash Holdings

The international financial crisis in 2008 had an intense impact on world economy,leading to a frequent fluctuation of economic environment.And then more stringent requirements are proposed for companies to have financial decision-makings,and also operational risks faced by them and its sensitivity further increase.In this context,in order to deal with the economic uncertainty,many enterprises choose to hold more the most liquid asset--cash,so enterprises and academic circles pay more attention to the role of cash holding.The current research on corporate cash holdings is rich,but the existing literatures ignore an important industry trait--industry growth and its impact on corporate cash holdings.This paper attempts to investigate the reasons for the difference in cash holding among listed companies from the perspective of industry growth under the different economic backgrounds.Then,it discusses the effect of property rights on cash holding.For considering from the 18 th National Congress,the economy of Chinese has made a smooth transition from the financial crisis to the "new normal ".Faced with the new situation and new challenges at home and abroad,our government has created many innovations in the use of macro-control,which undoubtedly has a significant impact on the corporate cash holding decisions.Therefore,this paper also examines the impact of industry growth on cash holdings in the context of the "new normal economy".In view of this,this paper takes the a-share listed companies as the research sample from 2008~2016 and divides the sample into two stages.The first part is the five years after the financial crisis,namely,2008~2012.The rest is the four years since the 18 th national congress,which has been in the stage of "the new normal",2013~2016.And the influence of industry growth on corporate cash holdings has been tested.In this paper,the empirical results show that:(1)There are real differences in the corporate cash holdings between different industries,and industry growth is significantly correlated with the corporate cash holdings.In the context of economic fluctuation,industry growth has a significant positive impact on the corporate cash holdings;while under the new normal,industry growth has a significant negative influence.(2)Property rights have a significant regulatory effect on the relationship between industry growth and cash holding behavior.Regardless of the economic background,the influence of industry growth on corporate cash holdings of nonstate-owned enterprises is far greater than that of the state-owned enterprises cash holding.Current China is in a critical period of economic transformation and upgrading,in order to ensure continuous development,enterprises should match their cash holding policies and industry development,and pay attention to the inherent law of industry development and the traits of the growth stage.