Being different from the previous research, this paper studies the influence of relationship trading on cash holding and the adjustment function of internal control based on the principal status of relationship trading in market. Results show that customer relationship trading leads to the decrease of corporate cash holding while supplier relationship trading the increase, and that this kind of relationship will change according to different market positions of all parties in trades. Further

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... earch demonstrates that internal control has significant but opposite effect on this influence. It has been found that relationship trading is an important measure taken by cooperation in reaction to the instability of external environment and the realization of reinforcing the corporation for a win-win, but the double-edged sword has different economic effects on cash holding. Therefore, establishing a comprehensive and effective internal control system is the requirement of ensuring the scientific management. It could be an essential mechanism to protect the profits of all parties in trading, which displays the important value of internal control of allocating interests.