Cash Holdings and Excess Credit - Empirical Evidence from Chinese Listed Companies

摘要

This paper studies the impacts of cash holdings on excess credit using a balanced panel of 988 Chinese listed companies. Regression results show negative correlation between cash holdings and the possibility of occurrence of excess credit in Probit model. The lower the corporate cash holdings level, the higher the probability that the enterprise appears excess credit. Empirical results are consistent with the pecking order theory, corporate cash holdings policy can affect the corporate financing decision.