중국기업의 소유 및 지배구조가 현금보유 및 경영성과에 미치는 영향

Abstract

This study empirically examines the impact of corporate ownership and governance structures on cash holding of Chinese firms as well as how differently the firms use cash reserves depending on their ownership and governance structures. We also examine the impact on business performance. We find that the corporate ownership and governance structures affect the cash-holding tendency of Chinese firms. Firms with higher largest shareholders' equity ownership and smaller board size held more cash reserves. By contrast, firms with diffuse ownership structure and larger board size might have less efficient monitoring and decision-making mechanism, and therefore waste resources for inefficient capital expenditure and R&D expenditure. Therefore, the latter firms have less cash reserves. In addition, the difference in cash usage affects firm performance, and firms with lower largest shareholders' ownership and larger board size show lower ratio of operating profit to sales. However, firms with higher largest shareholders' ownership and smaller board size show better corporate performance. Lastly, the ownership and governance structures also affect the dividend policy, and firms with higher largest shareholders' ownership are likely to pay more dividends since they have more cash reserves. Those with lower largest shareholders' ownership do not distribute internal cash reserves to shareholders. These results imply that firms with lower largest shareholders' ownership and diffuse ownership structure have more serious agency problem between shareholders and managers. Therefore, more efficient and stronger monitoring mechanism should be established. As for the board size, smaller board of directors seems to be more efficient, and outside directors do not play a relevant role since they do not affect the cash-holding tendency. Chinese firms' outside directors might be less independent, and the function of board of directors should be strengthened.