Groups of Companies, Cash Holdings Level and Credit Risk

Based on KMV model, this paper empirically studies the internal relationship between groups of companies, cash holdings level and credit risk, and tentatively explores the intrinsic mechanism between cash holdings and credit risk of state-owned groups of companies. The research shows that :(1) compared with companies with independent legal persons, the cash holdings level of listed subsidiaries of groups of companies is lower, and the cash holdings level of state-owned and private groups of companies is significantly different;(2) the cash holdings level of listed companies is negatively correlated with the credit risk, but the state-owned ownership property weakens the relationship;(3) at the groups of companies level, the negative correlation between cash holdings level and credit risk is only maintained in the groups of companies with private ownership property.