Empirical Research on the Relationship between Industry Working Capital Shortfall and Company Cash Holding in the Same Industry
Affected by the fluctuation of the market and economic environment during the epidemic period, the capital pressure of companies has increased sharply, which increases the possibility of risk transmission in the same industry and poses new challenges to the operation and financing of companies. From...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Wiley
2022-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2022/5146764 |
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| _version_ | 1832564788226424832 |
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| author | Zhaohua Li Junyi Jiang Lijuan Xia Chien-Chi Chu |
| author_facet | Zhaohua Li Junyi Jiang Lijuan Xia Chien-Chi Chu |
| author_sort | Zhaohua Li |
| collection | DOAJ |
| description | Affected by the fluctuation of the market and economic environment during the epidemic period, the capital pressure of companies has increased sharply, which increases the possibility of risk transmission in the same industry and poses new challenges to the operation and financing of companies. From the perspective of preventive motivation of corporate cash holding, we creatively use the industry working capital shortfall as the explanatory variable to construct an Extended Cash Holding Model and a Cash Holding Value Regression Model. Taking the panel data of A-share listed companies in Shanghai and Shenzhen as samples, this paper uses the Classical Linear Regression Model and Fixed Effects Regression Model to study the relationship between industry working capital shortfall and cash holdings in the same industry, as well as the relationship between industry working capital shortfall and cash holding value. The empirical results show that industry working capital shortfall has an important impact on the cash holding level within the same industry, and the cash holding level is significantly and positively correlated with industry working capital shortfall. Moreover, this study also reveals that the industry working capital shortfall has a dual impact on cash holdings. Specifically, the higher the risk of industry working capital shortfall, the lower the value of company cash holdings. The conclusions of this paper not only extend the research on cash holding but also provide support and reference for companies to optimize the cash holding value. |
| format | Article |
| id | doaj-art-ef6d8f35b6774feaa3d710cdbfd406a3 |
| institution | Kabale University |
| issn | 1607-887X |
| language | English |
| publishDate | 2022-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-ef6d8f35b6774feaa3d710cdbfd406a32025-02-03T01:10:19ZengWileyDiscrete Dynamics in Nature and Society1607-887X2022-01-01202210.1155/2022/5146764Empirical Research on the Relationship between Industry Working Capital Shortfall and Company Cash Holding in the Same IndustryZhaohua Li0Junyi Jiang1Lijuan Xia2Chien-Chi Chu3School of AccountancyCenter for Science Communication and Achievement TransformationSchool of Economics and ManagementSchool of Economics and ManagementAffected by the fluctuation of the market and economic environment during the epidemic period, the capital pressure of companies has increased sharply, which increases the possibility of risk transmission in the same industry and poses new challenges to the operation and financing of companies. From the perspective of preventive motivation of corporate cash holding, we creatively use the industry working capital shortfall as the explanatory variable to construct an Extended Cash Holding Model and a Cash Holding Value Regression Model. Taking the panel data of A-share listed companies in Shanghai and Shenzhen as samples, this paper uses the Classical Linear Regression Model and Fixed Effects Regression Model to study the relationship between industry working capital shortfall and cash holdings in the same industry, as well as the relationship between industry working capital shortfall and cash holding value. The empirical results show that industry working capital shortfall has an important impact on the cash holding level within the same industry, and the cash holding level is significantly and positively correlated with industry working capital shortfall. Moreover, this study also reveals that the industry working capital shortfall has a dual impact on cash holdings. Specifically, the higher the risk of industry working capital shortfall, the lower the value of company cash holdings. The conclusions of this paper not only extend the research on cash holding but also provide support and reference for companies to optimize the cash holding value.http://dx.doi.org/10.1155/2022/5146764 |
| spellingShingle | Zhaohua Li Junyi Jiang Lijuan Xia Chien-Chi Chu Empirical Research on the Relationship between Industry Working Capital Shortfall and Company Cash Holding in the Same Industry Discrete Dynamics in Nature and Society |
| title | Empirical Research on the Relationship between Industry Working Capital Shortfall and Company Cash Holding in the Same Industry |
| title_full | Empirical Research on the Relationship between Industry Working Capital Shortfall and Company Cash Holding in the Same Industry |
| title_fullStr | Empirical Research on the Relationship between Industry Working Capital Shortfall and Company Cash Holding in the Same Industry |
| title_full_unstemmed | Empirical Research on the Relationship between Industry Working Capital Shortfall and Company Cash Holding in the Same Industry |
| title_short | Empirical Research on the Relationship between Industry Working Capital Shortfall and Company Cash Holding in the Same Industry |
| title_sort | empirical research on the relationship between industry working capital shortfall and company cash holding in the same industry |
| url | http://dx.doi.org/10.1155/2022/5146764 |
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