-
Journal menu
- General information
- Editorial Board and External Reviewers
- Journal Policies
- Publication Ethics and Malpractice Statement
- Instructions for authors
- Paper reviewing
- Article processing charge
- Feedback from stakeholders
- Journal’s Open Access statement
- Order hard copies of the journal
- 50 most cited papers in the journal
DETERMINANTS OF CORPORATE CASH HOLDINGS: AN EMPIRICAL STUDY OF CHINESE LISTED FIRMS
Download This Article
Rizwan Ahmed, Wu Qi, Subhan Ullah 
, Danson Kimani
Abstract
This study explores the determinants of corporate cash holdings in the Chinese context. As one of the largest developing countries in the world, China offers an interesting opportunity to explore the role of corporate governance, and ownership structure in explaining corporate cash holdings. Owing to the unique economic problems in the developing and emerging economies, this study aims to investigate whether the research findings on developed countries could be generalized globally. Applying fixed-effects estimations on a sample of 115 Chinese firms listed between 2012 and 2016, we find that the level of corporate cash holdings has a significantly negative relationship with leverage, bank debt, non-cash liquid assets and managerial ownership. In particular, cash flow volatility, investment opportunity and dividend have a significantly positive relationship with cash holdings levels. These findings are consistent with the majority of the existing studies carried out in the Western context. We also find that firm size, cash flow, board independence and ownership concentration have a significant influence on the level of corporate cash holdings. Our study contributes to the finance literature and we offer new insights into the relationship between corporate governance and corporate cash holdings in the Chinese context. Some of the findings on the developed countries could be generalized to a wider context. Further, the unique relationship between corporate governance and cash holdings in the Chinese context provides empirical insights for further research.
Keywords: Cash Holdings, Chinese Listed Firms, Trade-Off Theory, Pecking Order Theory, Free Cash Flow Theory
JEL Classification: F65, G23, G3
Received: 14.01.2018
Accepted: 17.03.2018
Published online: 20.03.2018
How to cite this paper: Ahmed, R., Qi, W., Ullah, S., & Kimani, D. (2018). Determinants of corporate cash holdings: An empirical study of Chinese listed firms. Corporate Ownership & Control, 15(3), 57-65. https://doi.org/10.22495/cocv15i3art5
