An empirical study on the relationship between positive excess cash holdings and the performance of investment in china listed firms

摘要

This paper studies the relations between listed firms’ positive cash holdings and investment behavior in china,and examine whether the investment behavior affected by excess cash holdings is reasonable? We select listed firms that continuously have data for more than 4-years during 1998-2003 in Shenzhen and Shanghai Stock Exchange as sample. We find,listed firms’ positive cash holdings and long-time investment,fixed-assets investment have a positive relationship,and with short-time investment have a negative relationship. Listed firms’ temporary positive cash holdings and short-time investments have a negative relationship. The performance and long-time investments,fixed-assets investments affected by Listed firms’ temporary positive cash holdings have a negative relationship. Listed firms,which continually 2-years positive cash holdings,long-time investments increase with positive excess cash holdings,but it’s performance is very better than short-time investment’s. Listed firms,which continually 3-years positive cash holdings,short-time investments reduce with positive excess cash holdings,but other investments have no relationship,and investments that affected by positive excess cash holdings have no benefit to the performance.