The Impact of Cash Holdings on Firm Value and the Moderating Role of Leverage: A Time-Series Analysis of Gree Electric

Xinyue Wang

doi:10.54691/nngfab03

Authors

Xinyue Wang Guangxi Minzu University, Nanning 530006, Guangxi, China

DOI:

https://doi.org/10.54691/nngfab03

Keywords:

Cash Holdings; Firm Value; Leverage Moderation; Time-series Analysis; Gree Electric.

Abstract

Based on the trade-off theory, priority financing theory, and agency theory, this article selects quarterly financial data of Gree Electric from the first quarter of 2004 to the first quarter of 2026, and uses time series analysis to empirically study the impact of cash holdings on enterprise value and the moderating effect of leverage. The research results show that cash holdings with a lag of one period have a weak positive impact on enterprise value at a significant level of 10%; But leverage did not show any statistical moderating effect. The leverage adjustment effect is not significant, because most of Gree's liabilities are interest free operating liabilities, and interest-bearing liabilities have been at a very low level for a long time, greatly weakening the governance role of debt. To ensure the reliability of the conclusion, this article conducted ADF unit root test, time series regression, and robustness test by excluding samples from the epidemic stage. This study can provide empirical reference for the liquidity management and capital structure decision-making of mature manufacturing enterprises, and also enrich the boundary related theories of cash holding value effects.

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