Research on Cash Holdings, Equity Dispersion and Company Performance
- https://doi.org/10.2991/icesem-18.2018.63How to use a DOI?
- Dispersion; Corporate performance; Cash holdings
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.
- © 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 -