The impact of cash holdings on investment decision and dividend policy: Evidence from split-share structure reform in China

• Main Authors: Xin-Fang Huang, 黃信芳
• Other Authors: Jung-Hua Hung
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/4tw24g

碩士 === 國立中央大學 === 企業管理學系 === 102 === This study examines financial policies of Chinese listed firms with different ownership structure after the split-share structure reform. The sample period is between 2001 and 2012. The empirical results indicate that, after the split-share structure reform, Chinese listed firms increase capital expenditures and reduce cash dividend payments. In addition, increasing capital expenditures and reducing cash dividend payments show positive effects on firm value, suggesting that the split-share structure reform would mitigate agency problems and financial constraints, and further affect Chinese listed companies’ cash management policy. However, when we divide sample into state-controlled firms and non-state-controlled firms, state-controlled firms still have overinvestment problem after the reform. This result suggests that split-share structure reform has little influence on state-controlled firms. For non-state-controlled firms, investment decision and dividend policy show positive impact on firm value after the reform, indicating that the split-share structure reform has more effect on non-state-controlled firms than state-controlled firms.