Internationalization Strategy,Product Market Competition And Company Cash Holding Decision

With the development of economic globalization,Chinese enterprises are increasingly integrating into the international market.As a core component of corporate strategic decision-making,internationalization strategy has become an important choice for many enterprises.However,it is not easy to open up the international market and win a place in international competition.Therefore,how to strengthen the strength of Chinese companies in international competition has become an important research topic for the development trend and characteristics of international enterprises.At present,the research on cash holding issues at home and abroad has become more and more perfect.From the micro-individual individual characteristics to the meso-industrial factors,to the macro-environmental environment,a richer classic literature has emerged.However,few scholars have discussed the issue of cash holdings for implementing internationalized strategic enterprises.Since the company’s cash holdings are an important financial decision based on the company’s strategic considerations,it is necessary to examine the cash holdings of international companies.For Chinese companies that actively promote internationalization strategies,what impact will they have on their cash holding decisions in the process of international expansion? What are the possible adjustment factors? How do they affect the cash holdings of companies? These problems are not currently being proved in the academic world,and naturally form the logical starting point and research starting point of this paper.Based on the analysis of relevant literatures at home and abroad,this paper combines the research of many scholars on the internationalization strategy of enterprises and cash holdings,and puts forward the possible impact of the internationalization strategy of enterprises on the level and value of cash holdings.Then,based on the sample of A-share main board listed companies in Shanghai and Shenzhen in 2011-2016,this paper explores the impact mechanism of internationalization strategy on corporate cash holding decision,and on this basis,the adjustment effect of product market competition on the relationship between the twois further examined.Empirical studies show that:(1)With the deepening of the internationalization strategy,the company’s cash holdings will increase significantly,and the marginal value of cash holdings will be higher,that is,the internationalization strategy will promote the cash holding decision.(2)As the degree of competition in the industry product market intensifies,the promotion strategy of the internationalization strategy will increase the cash holding level and the marginal value of the enterprise.That is,the fierce market competition strengthens the positive effect of the internationalization strategy on cash holding decisions.The research in this paper reveals that enterprises should pay attention to the accumulation of internal funds when promoting the internationalization strategy,and keep a clear understanding of the market competition pattern,and optimize the efficiency of cash allocation by leveraging the external governance effect.