Confucianism And Financing Constraints

Financing constraint is one of the important factors limiting the expansion of reproduction of enterprises.On the one hand,high-quality enterprises have gone abroad for listing due to difficulties in domestic financing,expensive financing and other issues.On the other hand,fraud of listed companies has emerged in an endless stream,the interests of fund suppliers are not guaranteed,and the efficiency of resource allocation is reduced,which has a greater impediment to the long-term development of China’s economy.As an important part of Chinese traditional culture,Confucianism has affected all aspects of society.Confucianism not only plays an important role in improving the country’s cultural soft power and cultural self-confidence,but also plays an important role in enterprise management and decision-making.Based on this,this paper explores the relationship between Confucianism and corporate financing constraints through the two paths of reducing the principal-agent cost and improving the quality of information disclosure,and puts forward relevant suggestions for enterprises to ease financing constraints and correctly treat the connotation of Confucianism.First of all,through the reading of relevant Confucian classics and the collation of relevant documents on financing constraints,it is found that Confucianism has a greater role in easing the financing constraints of enterprises.From the outside to the inside,the theoretical mechanism of the two is preliminarily analyzed.Secondly,this paper starts from the mechanism of reducing the principal-agent cost and improving the quality of information disclosure,analyzes the mechanism of the impact of Confucianism on corporate financing constraints,and puts forward relevant assumptions.Considering the influence of enterprise scale,market development,property rights and other factors,this paper also conducts a group study.Finally,using the sample of listed companies in Shanghai and Shenzhen from 2010 to 2019,this paper empirically tests the impact of Confucianism on corporate financing constraints,and draws the following conclusions: First,Confucianism is negatively related to financing constraints,and Confucianism can effectively alleviate the extent of corporate financing constraints;Secondly,the agency cost and the quality of information disclosure play a part of intermediary effect in the process of the influence of Confucianism on financing constraints;Third,the Confucianism can effectively alleviate the degree of corporate financing constraints in non-state-owned enterprises,regions with low market development,smaller companies,and samples where the two positions of chairman and general manager are different.In addition,this paper also carried out the robustness analysis of replacing the explained variables,adding the fixed effect of provinces,and adding other control variables.The results are still significant.Through theoretical analysis and empirical test,this paper draws the conclusion that Confucianism is conducive to promoting corporate governance.Therefore,it puts forward suggestions from the following two aspects: first,enhance cultural self-confidence and correctly understand the connotation of Confucianism;Second,continue to play the role of Confucianism as an informal system in corporate governance.