A Study on Cash Holding Motivation of Listed Companies

Cash, every company or individual will hold more or less, but why hold cash? Individuals are to buy what they like or sell what they produce. What about the company? What about Listed Companies in particular? In 2008, the United States caused and radiated the global financial crisis. I believe you and I are still very impressed. How did it come into being? The subprime mortgage crisis on Wall Street is the most direct cause of the financial crisis. And the existence of a large number of economic bubbles is a fatal danger. The economic bubble makes the industrial capital chain lengthen, causing the company's liquidity shortage, which leads to the breakup of the capital chain, and finally leads to the company's financial crisis and lead to bankruptcy. When the global economy was still under the shadow of the financial crisis, the European debt crisis broke out in 2010, which intensified the fluctuation of the world economy and made the company's capital chain more fragile. Therefore, the liquidity problem has become the focus of the company in recent years. In the financial management of the company, the flexibility of property will also be put in the first place to strengthen the liquidity management. Cash, as the most liquid asset of a company, is held by a large number of Listed Companies in developed countries. At the same time, due to the imperfect development of capital market and the unreasonable ownership structure of listed companies, it is of great significance to study the cash holding motivation of Listed Companies in China. This paper studies the motivation theory of cash holding by combining theory with empirical research. Taking the apartments listed in Shanghai Stock Exchange from 2014 to 2018 as samples, this paper establishes a data model to analyze the motivation of cash holding, and finally puts forward reasonable suggestions for China's listed companies.