Research Of Financial Development, Financing Constraint And Investment Efficiency Of Energy Industry

China has become the world’s third-largest energy consumer. Healthy development of the energy industry has a strategic importance for the maintenance of national security strategies, hence, enhancing the comprehensive national strength is of a great strategic importance. Since we are in a critical period of major energy and power transformation, how to achieve rapid and healthy development of China’s energy industry has been a concerned hot topic among the communities. This paper, respectively, applies theoretical analysis, empirical testing and case study analysis to conduct an in-depth study on the current situation of China’s energy industry investment financing activities, explores financial development mechanism to ease financing constraints and improve investment efficiency, as well as, clarifies the path of the impact of financial support on the sustainable development of the energy industry. The paper concludes by proposing policy recommendations to promote the efficiency of China’s energy industry investment. The main contributions of this paper are as follows:First, the study builds a more comprehensive system of financial development indicators, which includes five indicators, namely; related financial ratios, financial depth, the degree of market economic reform, marketization of financial sector and financial sector competition, which makes up for the shortcomings in the existing studies that use single financial development indicator. This not only provides a comprehensive indicator system for the financial development-related researches, but also has an important theoretical significance to the study.Second, using three different models, "investment- cash flow sensitivity test model", "cash – cash-flow sensitivity test model" and "investment spending cash flow – cash-flow sensitivity test model", the study, respectively, examines the impact of financial development on energy industry financing constraints. Results show that financial development can ease financing constraints in the energy industry, providing a reliable testing tool for further study on the relationship between financial development and financing constraints.Third, this paper uses path method, and through the construction of intermediary-effect test model, digs the path of the role of the effect of financial development on investment efficiency. The empirical results confirm that financing constraints is the path of financial development impact on the investment efficiency. This study reveals the path-role of the financing constraints when financial development impacts investment efficiency, further digs the impact-path of the effect of financial development on energy industry investment efficiency, thus effectively helping to fill the existing research gaps. This paper enriches and expands theoretical study of the impact of financial development on the energy industry investment activities.And, fourth, this paper combines authenticity and scientific aspects of theoretical analysis of actual cases and empirical conclusions. This paper has selected two companies, namely; Guangdong Electric Power Development Co. Ltd, and Jiangxi Ganneng Co. Ltd, as the case study object, and through comparison and case analysis, support prior conclusions. The paper effectively uses case studies as a supplement to the theoretical analysis and empirical research to enhance the reliability and usefulness of the research findings, hence providing useful references to the relevant regulatory authorities in promoting more sustainable energy industry development plans.