Proceedings of the 2018 2nd International Conference on Education Science and Economic Management (ICESEM 2018)

Research on Cash Holdings, Equity Dispersion and Company Performance

Authors
Jiakang Wang, Ying Wang
Corresponding Author
Jiakang Wang
Available Online August 2018.
DOI
https://doi.org/10.2991/icesem-18.2018.63How to use a DOI?
Keywords
Dispersion; Corporate performance; Cash holdings
Abstract

Taking the A-share listed companies of the Shanghai and Shenzhen Stock Exchanges in 2012-2016 as research samples, the article studies the corporate cash holdings behavior and the influence of company performance from the perspective of equity disperse degree. This article is based on two main model, one is cash holding model by Opler (1999), and the other is cash value model by Dittmar and Smith (2007), Faulkender and Wang (2006). The research results show that: (1) the shareholding of cash held by large corporations is relatively small; (2) The dispersion of option did not significantly improve corporate performance, and it also played a negative role. The paper argues that the reasons are as follows: on the one hand, a diversified shareholding structure of the company can form an effective supervision system, push business performance for forward; while on the other hand, it will lead to the final separation of the control over the actual cash flow right, which may result in severe agency conflicts and a major shareholder of the short-selling phenomenon. It is because the negative impact of short-selling is greater than the positive role of supervision, the expected conclusion is reversed.

Copyright
© 2018, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the 2018 2nd International Conference on Education Science and Economic Management (ICESEM 2018)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
August 2018
ISBN
978-94-6252-557-3
ISSN
2352-5398
DOI
https://doi.org/10.2991/icesem-18.2018.63How to use a DOI?
Copyright
© 2018, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Jiakang Wang
AU  - Ying Wang
PY  - 2018/08
DA  - 2018/08
TI  - Research on Cash Holdings, Equity Dispersion and Company Performance
BT  - Proceedings of the 2018 2nd International Conference on Education Science and Economic Management (ICESEM 2018)
PB  - Atlantis Press
SP  - 283
EP  - 287
SN  - 2352-5398
UR  - https://doi.org/10.2991/icesem-18.2018.63
DO  - https://doi.org/10.2991/icesem-18.2018.63
ID  - Wang2018/08
ER  -