To adapt to globalization, Chinese multinational firms have more exploitation of cash. This paper shows that Chinese multinational corporations (MNCs) do not hold significantly more cash relative to domestic firms unless these multinationals heavily relay on the foreign sales. In addition, the multinationals of non-State-Owned Enterprises (Non-SOEs) exhibit the insignificant difference in cash holdings for non-multinationals. We also find that Chinese MNCs invest more but are less profitable, especially in non-SOE subsample. Overall, we conclude that the need of cash liquidity of multinational corporations in China is different from those in U.S.
Cash holdings, Multinationals, SOEs, China
Asian Studies | Corporate Finance | International Business
Finance Research Letters
WU, Weijun; YANG, Yang; and ZHOU, Sili.
Multinational firms and cash holdings: Evidence from China. (2017). Finance Research Letters. 20, 184-191. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/5319
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