A Study of the Determinants of Cash Holdings in China's Listed Companies

摘要

Cash is the companies' most liquid assets,and also an important prerequisite to ensure continued operations. As for the determinants of cash holdings, many foreign and domestic scholars have studied these questions from different angles and have obtained many significant results,but obviously we can see the shortcomings of the domestic theories,especially facing China's special economic market environment, whose applicability and practicality have yet to be further confirmed. In this paper,we do the empirical research with the samples of Shanghai and Shenzhen Ashare listed companies in China,focusing on the companies themselves and corporate governance factors,and we find that the companies' cash holdings are positively correlated with Growth opportunity,Firm size,Cash flow,Debt time structure, total assets turnover rate,Dividend payments significantly and negatively correlated with Financial leverage,Bank debt,Current assets rate, Board shares,Leadership structure significantly,but they are not significantly correlated with Z index, Independent board rate and Controlling shareholder type. Meanwhile, the industrial factors are also important determinants which affect companies' cash holdings.