An Empirical Study of Corporate Cash Holdings of Chinese Listed Firms

摘要

Using a substantial panel data of publicly listed Chinese firms over the period of 1997 through 2006; we attempt to examine the factors influencing corporate cash holdings in one of the emerging markets in the world. In this study, we recognized the institutional structure and legal systems in which Chinese firms operate. We used the panel regression model and the results indicate that corporate cash level increases with payout to investors in the form of dividends, growth opportunities, and large cash flows, and decreases with size of the firm, leverage, debt structure and level of liquid assets. Further, the result suggests that neither the trade-off theory, pecking-order theory nor agency theory has the strongest incentive on corporate cash holdings of Chinese listed firms.