Abstract
From the perspective of dual principal-agent theory, this paper takes the panel data of A-shares in China from 2012 to 2019 as the research object, uses fixed-effect model to empirically analyze the influencing factors of cash holdings of listed companies from three aspects: ownership structure, board characteristics and quality of internal control information disclosure. At the same time, the empirical results are explained theoretically. The research in this paper is of positive significance to the cash holding management of listed companies in China.
Highlights
In the perfect capital market, the complete symmetry of information, no transaction cost and no friction in the market make it easy for a company to solve the financial dilemma by raising insufficient funds with expected internal cost
My research focuses on the influencing factors of cash holdings of listed companies in China, so I will discuss prior literature related to these areas and detail the key hypothesis to be tested
Regression Analysis of Ownership Structure and Cash Holdings According to the regression results in Table 3, whether cash holding is measured by CASH1 or CASH2, the results show that: 1) The relationship between the shareholding ratio of the largest shareholder and cash holdings is inverted U-shaped
Summary
In the perfect capital market, the complete symmetry of information, no transaction cost and no friction in the market make it easy for a company to solve the financial dilemma by raising insufficient funds with expected internal cost. The trade-off theory and the financing priority theory both focus on the influence of the internal financial characteristics of the enterprise on the cash holdings They think that the goal of the company is to maximize the value of shareholders, ignoring the relevant interests of the management. In order to be able to carry out in-service consumption, obtain welfare allowance, acquire and build an empire through mergers and acquisitions, make inefficient investment and evade the supervision of external capital market, the management tends to hold manipulated cash to gain their own interests at the expense of shareholders This is the first type of agency conflict. The analysis of the determinants of cash holdings in this paper is mainly based on the dual principal-agent theory
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