A Study On The Theory And Method Of Enterprise Investment With Financing Constraints

Since China's entry into WTO, the internal structures of Chinese enterprises have been changing significantly to accommodate the turbulent external environment. Thanks to the emergence and prosperity of the domestic stock market, the external financing behaviors of the enterprises are becoming more market oriented. Under such external financing uncertainties, it is of great importance for the enterprises to make proper choice between investment opportunities and to optimize investment decision rules. Thus, it becomes more theoretically and empirically valuable to study the enterprises'investment behaviors influenced by both of its financing and investment activities.This paper starts from summarizing the theories of corporate investment in the aspect of macroeconomics, including accelerating theory, neo-classical investment theory, cost adjustment theory, etc.. Then, real option method is used to study the optimal investment rules under uncertainties. Thirdly, it studies modern corporate financing theory, constructs a financing model in an environment of information imperfections, and empirically analyzes the financing preferences of the domestic listed companies and the reason causing these preferences. Finally, it studies the influence of internal fund on the investment behavior under the imperfect capital market, provides for the optimal internal capital holding strategies with defensive intention, and derives the optimal investment threshold and decision rule with financing constraints.The innovation of this paper shows as follows. Firstly, I introduce the method of real option to analyze the moving patterns of capital marginal value for enterprises meeting the requirements of Cobb-Douglas production function, from which I derive optimal investment thresholds and scales under cost uncertainties. Secondly, I study the influence of internal fund on corporate investment behavior in the imperfect capital market, and utilize game theory to model the enterprises financing activities upon the constraints of internal fund under condition of the existence of private interests of managers. Moreover, I study the impact of internal capital accumulation upon the reduction of financing constraints, and provide the optimal cash holdings strategies balancing the investment demands between the current and the future. Thirdly, I construct a triple period dynamic model under the uncertainties of internal fund and investment timing. Through comparing the investment values of different periods, I derive the optimal investment threshold. Combining panel data with time data, I empirically analyze the relationship among corporate investment behavior, internal fund of different periods and financing constraints by the way of linear regression.