Corporate Cash Holdings and Firm Ownership Structure: An Empirical Study of Chinese Listed Firms

This study provides empirical evidence for examining the values of marginal cash holdings for Chinese listed firms from 2007 to 2021. The fixed effect panel analysis model for 3,419 non-financial listed firms was employed in this study. We discovered that a firm’s marginal value of cash is sensitive to its cash holdings and also affected by its leverage. The extra value of cash is low in firms with high leverage ratios compared to those with low leverage ratios. An empirical analysis showed that the marginal value of cash is 1.2101 RMB for all Chinese listed firms considered, and it is slightly higher than that of firms in Korea, Taiwan, and the United States in previous studies (0.4~0.94). Specifically, the marginal value of cash in Chinese state-owned enterprises is 1.2629 RMB, which is 8.24% higher than that of private listed firms, which is 1.1668 RMB.