Comparison on the Dynamic Adjustment Behaviors of Cash Holdings of Listed Companies in the Perspective of Growth

With the data of 435 non-financial listed companies of Shanghai and Shenzhen from 2007-2012, this paper compares the dynamic adjustment behaviors of cash holdings in the perspective of growth, which include the adjustment speeds and forms. We find that there is optimal level of cash holdings, and the average adjustment speed of cash holdings for high-growth sample companies is 0.356, which is faster than low-growth samples (0.329), while the adjustment form has a certain similarity. The results show that compared with the foreign companies with more developed capital market, the adjustment speed of cash holdings of listed companies in China is slower, which overall lags behind, presents a special phenomenon of adjustment in continuous single direction.