Abstract：
This paper makes a distinction on the nature of ownership and empirically investigates how diversification affects cash holdings with samples listing firms from 2007 to 2009 unbalanced panel data. It is found that China’s listing firms show no significant correlation between diversification and cash holdings. When distinguishing ownership nature for study, state-owned firms show significantly positive relation while non-state-owned companies show significantly negative. This empirical research indicates that compared with state-owned firms, non-state-owned firms may enhance the efficiency of ICM (Internal Capital Marketing) through diversification and reduction of cash holdings.
2012 
