Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2022.2080740
Cash holdings, the internal capital market, and capital allocation efficiency in listed companies
Jiahua Zhao
Minglin Wang
Qiuqin He
Sažetak
The rise in firm-level cash asset ratios has become a prominent
trend in countries around the world which may further influence
the capital allocation efficiency. This study analysed the inefficient
effect of cash holdings on the capital allocation by combining the
internal capital market theory with principal–agent theory and
asymmetric information theory. The theoretical hypotheses were
tested using linear panel regression models based on financial
data from Chinese listed enterprises. We found that corporations
holding more cash assets had lower capital allocation efficiency
than those with fewer cash assets, which is consistent with
agency theory and asymmetric information theory. Internal capital
markets exacerbated this adverse effect. Additional testing was
conducted to examine the heterogeneity of this effect between
different types of ownership and strategy; the findings showed
that an increase in cash holdings had a greater marginal impact
on overinvestment among privately owned enterprises and
underinvestment among state-owned enterprises. Internal capital
market operation alleviated the problem of overinvestment but
exacerbated the problem of underinvestment in privately owned
enterprises, whereas it increased overinvestment in state-owned
enterprises. The results suggested that different types of enterprises
should deal with the inefficient effect of cash assets based
on the causes of inefficient investment.
Ključne riječi
Cash assets; internal transactions; overinvestment; underinvestment
Hrčak ID:
303756
URI
Datum izdavanja:
31.3.2023.
Posjeta: 326 *