Peer Effects on Chinese Corporate Cash Holdings: A Fixed-effects Model

摘要

Considering the important role of cash holdings and increasing communication between firms, we propose a fixed-effects model which tests the relationship between companies' cash decision and its rival firms'. We find that there is a significant cash holding cutting following peer companies average cash holdings using 6027 observations from China during the year 2014-2017. But in our analysis of different property right, the evidence is not significant, indicating that both state-owned and non-state-owned enterprises prefer adjust their own cash holdings in the opposite direction of rival firms.