| As well as we know,finance is not only indispensable to economic development,but also the blood of national economy.Under the background that China is currently in the important stage of transforming the mode of economic development and improving the quality of economic development,how to effectively take advantage of the capital market to serve for the real economy as well as promoting high-quality economic development has become an important issue that corporates and governments need to urgently solve.Since the 18 th National Congress of the Communist Party of China(CPC),President Xi Jinping has emphasized on the important relationship between finance and the real economy.At the Fifth National Financial Work Conference held in July 2017,the development of the real economy has been the theme of financial work in recent years,and the conference even pointed out that the real economy is the foundation of finance.Finance needs to take service for the real economy,comprehensively improve the efficiency and standardization.In order to allocate more financial resources to key areas and weak links in economic and social development,at the same time better satisfaction the needs for the diversified real economy.Under the framework of traditional financial theory,the Q-theory of investment pointed out(Tobin 1969),higher stock price efficiently reflects stronger growth opportunities,so high valuation firms invest more to exploit better opportunities.Indicating that Q theory has always been regarded as the bridge for connecting capital market and real economy.However,the theoretical premise relies on an important assumption,that capital markets are efficient and that stock prices are a true reflection of the company's intrinsic value.Nevertheless,due to the interference of market friction and irrational behaviors of investors,the capital market is not completely efficient,and market prices often fail to reflect the real value of assets,resulting in mispricing(Baker et al.,2003;Polk and Sapienza,2009;Dong et al.,2017).Especially in the emerging economies with incomplete relevant systems,the market speculation atmosphere is strong,information asymmetry is serious and the investors' cognitive bias is large,therefore mispricing is more serious and frequent(You and Wu,2012;Zhao and Huang,2019).Hence,under the circumstances that capital market mispricing may become normal,studying how to effectively use the capital market to serve for the real economy and at the same time carry forward the ability of guidance play an important role for improving the efficiency of resource allocation and the development of high-quality economy.Firm as the vital micro-organizational form,plays an important role in the operation of real economy.Besides,firm is also an indispensable portion and a key carrier to promote the transformation and upgrading of the industrial structure,as well as the improvement for the quality of economic development.Therefore,from the perspective of enterprises,using investment and financial decisions to exploring and analyzing the impact of capital market mispricing helps us clarify the micromechanism of the capital market serving for the real economy.And then,in terms of financing for instance leverage adjustment,as the core content of corporate financing decisions,is not only the result of the management's trading off financing pros and cons,but also pay close attention to attract investors' attention.At the same time,in recent years,leverage adjustment is also the important topic for government economic work.According to the survey of National Laboratory of Finance and Development,Chinese Academy of Social Sciences,data shows up to 2015,China's total debt was 168.48 trillion yuan and the total leverage ratio was 249%.Among them,the debt issue of non-financial enterprises is particularly acute,with a leverage ratio as high as 156%.The rising leverage ratio has laid a potential risk for China's economic and social development.Therefore,the adjustment of leverage is extremely urgent.At the same time,the Central Economic Work Conference held in2015,has been treated "leverage adjustment" as one of the key tasks of supply and structural reform,and made it clear that we should increase the proportion of equity capital,rely on corporate leverage adjustment and promote economic sustainable and healthy development.It is worth pointing out that the decision of corporate leverage adjustment merely depends on the trade-off between adjustment cost and income.Since,the bias of stock price valuation would directly affect the cost of firm equity financing,hence mispricing may affect the firm's dynamic leverage adjustment.In addition,the adjustment of capital structure is also closely related to enterprise value,that investors care about.As a result,corporate managers will also change the existing capital structure according to the feedback of investors' pricing information,to cater the market participants preference.From this perspective,capital market mispricing might have a more profound impact on the dynamic leverage adjustment than traditional economic factors.Since the reform and opening up,China's economic development has made remarkable achievements,but in the process of rapid growth also accumulated plenty of problems and contradictions.The irrational economic structure and the low quality of growth are important problems that restrict the further development of China's economy and society.China's economy has been transitioning from a phase of rapid growth to a stage of high-quality development,which should focus on better quality,higher efficiency,and more robust drivers of economic growth.General Secretary Xi has pointed out that to promote high-quality economic development,we need to focus on transforming and upgrading the industrial structure and making the real economy stronger and better.In fact,improving the quality of economic blossom requires shift development model from relying more on high-input and low-end industries to technology-driven industry and more relying on the emerging industries.Besides,energetically push forward to technological innovation,resource integrating process of mergers and acquisition,as well as speeding up efforts to shut down backward production facilities.Form the view of enterprises investment,technological innovation is the original drivers to maintain the corporate core competitiveness and the source of sustainable development of enterprises.Mastering the initiative of innovation is equivalent to seizing the opportunity for future development.Furthermore,Merger and Acquisition is also an important strategic method of enterprise resource allocation,as well as a nearest way to integration of resource,share technology and intellectual property,scale expansion,technology acquisition and brand value promotion(Chen et al.,2015;Lai et al.,2017).Otherwise,it is also of great strategic importance to realize resource integration,upgrading of industrial structure and the rationalization of industrial structure,as well as improving the quality of economic growth(Zhai et al.,2010;Zhang et al.,2017).As an important strategic decision in the process of enterprise development,innovation,research and development,merger and acquisition,on one hand,will inevitably attract the attention of market participants;on the other hand,these investment decisions also need a plenty of capital support.Which coincides with the channels that the capital market may influence the investment behavior.Therefore,from the perspective of enterprise innovation and merger and acquisition investment decision,could better clarify the micro mechanism of financial services to the real economy.This dissertation put forward the important topic that financial services to the development of real economy.Based on the behavioral finance theories such as information asymmetry,investor irrationality,centering theory and market timing hypothesis,this paper constructs the theoretical analysis framework in order to explain the effect of capital market mispricing and enterprise investment and financing behaviors.Then on the base of these and combined with the background of supply-side structural reform,leverage adjustment,innovation-driven development,resource integration and high-quality economic development,this paper empirically tested the influence of asset mispricing on investment and financing behavior from the perspective of dynamic leverage adjustment,corporate innovation,merger and acquisition as well as other specific investment and financing decisions.This dissertation is divided into seven chapters.The main research contents and relevant conclusions of each chapter are as follows:Chapter 1,Introduction.This chapter outlines research background,the significance,the thought of the issues,the methodology,expected contributions,and the framework,as well as writing arrangements.This chapter is overall planning.Chapter 2,Literature Review.This chapter mainly reviews the relevant research literature on capital market mispricing and corporate investment and financing behavior.And then on the base of these,this chapter further gives a brief commentary on the current status of mispricing.Chapter 3,Theoretical Analysis.This chapter is the theoretical analysis framework of capital market mispricing affecting corporate investment and financing behavior.Based on the background of supply-side structural reforms and high-quality economic development,this chapter taking the function of capital market to serve the development of real economy as the logical starting point.In view of the present behavioral financial theories such as information asymmetry and investor irrationality,besides combined with corporate market timing hypotheses and catering theory,logically discussed the inherent mechanism and path of mispricing affecting corporate investment and financing behaviors.And then under the premise of mispricing,setting up a theoretical analysis framework for corporate investment and financing decisions,established foundation for the empirical results that will be discussed later.Chapter 4,Capital Market Mispricing and Dynamic Adjustment of Capital Structural.As the core content of corporate financing decision,capital structure adjustment is not only the result of the managers' trading off on financing benefits and costs,but also the ways to attract investors attention,since capital structure reflects corporate value that participants will take it seriously.This chapter tries to investigate the effect of mispricing on corporate financing behavior from the perspective of dynamic adjustment of capital structure,and further discusses the mechanism of this effect.The empirical results show that :(1)In the case of equity overvalued and firm overlevered,the degree of mispricing is significantly positively correlated with the speed of capital structure adjustment,in other words,rapid the rate of adjustment.And further studies find that this correlation is more obvious in the samples with high stock liquidity and good enterprise growth.Overvalued stock prices provide great convenience for enterprise equity financing to support for capital structure adjustment to its' target leverage.(2)In the case of equity overvalued and firm underlevered,there is no significant relationship between the degree of mispricing and the speed of capital structure adjustment.(3)In the case of equity undervalued and firm overlevered,the degree of mispricing is significantly positively correlated with the speed of capital structure adjustment,also shows the rapid rate of adjustment.And further studies find that the correlation is more obvious in the sample with a higher shareholding ratio of the largest shareholder.At the same time,improving the probability of private placement.(4)In the case of equity undervalued and firm underlevered,the degree of mispricing is significantly positively correlated with the speed of capital structure adjustment,and the correlation is more obvious in the samples of regions with higher financial development level and better legal environment.All in all,these results show that market valuation bias has an important impact on corporate capital structure decisions.Overvaluation of stock price will reduce the cost of equity financing and provide more equity financing opportunities for overlevered companies.On the one hand,the undervaluation of stock price also provides opportunities for the private placement and benefit transmission of shareholders,thus prompting the overlevered companies nearest to target capital structure.On the other hand,when the stock price is undervalued and the firm is underlevered,enterprises will be encouraged to carry out more debt financing,and therefore convey a signal to the market indicating that these corporate is higher quality and then make further efforts to attract the attention of investors,finally raise its share price.Chapter 5,Capital Market Mispricing and Corporate Innovation.R&D as well as innovation,is an important investment decision for enterprises,and also an momentous force to promote the transformation and upgrading of industrial structure and improve the quality of economic development.The high risk and long cycle of innovation essence determines its strong dependence on equity financing.At the same time,corporate innovation is also a hot topic for capital market investors.This chapter examines in detail the tradeoff between the quantity and quality of innovation in an asset mispricing environment.Empirical results show:(1)When the stock price is overvalued,the degree of mispricing is significantly positively correlated with the number of enterprise patent applications,which means the more overvalued,the more number of patent applications.What's more,this effect is more obvious in the subsamples of firm overlevered and high financing constraint.In addition,these overvalued firms are more relying on equity financing.(2)When the stock price is undervalued,the degree of mispricing is also significantly positively correlated with the number of patent applications.But this mainly reflected in the non-invention patent,which means the more the stock price is undervalued,the more the number of non-invention patent applications.Furthermore,this effect is more obvious in the subsamples with insufficient debt,low financing constraint and shortsighted investors.This shows that overvaluation of stock price will bring financing advantages to enterprises,thus promoting investment in R&D and improving the quality of innovation.When the stock price is undervalued,enterprises tend to carry out strategic innovation to attract the attention of market participants and improve the stock price,and thus resulting in lower quality of innovation.Chapter 6,Capital Market Mispricing and Mergers and Acquisitions.Merger and Acquisition is an important strategic method of enterprise resource allocation,as well as a nearest way to integration of resource,share technology and intellectual property,scale expansion,technology acquisition and brand value promotion.What's more,it is also a great way to realize resource integration,promote industrial structure optimization and upgrading,as well as improving the quality of economic growth through mergers and acquisitions.This chapter investigates the influence of asset mispricing on the investment decision of mergers and acquisitions,and further explores its mechanism by combining with mergers and acquisitions payment methods and performance.The results show that:(1)There is a significant positive correlation between the degree of mispricing and the probability of M&A,which is existed in both the overvalued and undervalued samples.(2)When the stock price is overvalued,the positive correlation is more significant in the samples of regions with large financing constraints and low banking competition.(3)When the stock price is undervalued,enterprises tend to carry out diversified mergers and acquisitions,and the objects of mergers and acquisitions are mostly popular industries supported by industrial policies;4)From the perspective of payment method,when the stock price is overvalued,enterprises often use equity payment,which is more obvious in the samples with good stock liquidity and corporate overlevered;When the stock price is undervalued,cash payment is often used,which is more obvious in the samples with strong bank competition and insufficient corporate debt.(5)From the perspective of M&A performance,when the stock price is overvalued,the M&A premium paid by the enterprise is relatively high,and the M&A performance is significantly negative;When the stock price is undervalued,the enterprises mainly choose the industries supported by the policy for merger and acquisition,and the merger and acquisition premium is even lower,thus achieving a positive merger and acquisition performance.Chapter 7,Conclusions,Suggestions and Prospects.This chapter summarizes the main research conclusions of the whole paper,and puts forward corresponding policy suggestions based on the conclusions of the paper.Meanwhile,above them,pointed put the deficiencies of this research on mispricing and corporate investment and financing behavior.And then prospected the future research directions.The contributions of this dissertation are the following:Firstly,based on the perspective of asset mispricing,this paper studies the relationship between the capital market and the investment and financing behaviors of real economy.And then provides an empirical and theoretical basis for the financial services to the development of real economy,as well as expands relevant researches on the influencing factors of the investment and financing decision.Investment and financing behavior are important value-added activity in the process of enterprise development.However,most of the existing literatures study this subject under the condition of efficient market hypothesis,and few literatures study the investment and financing behavior of enterprises under the condition of mispricing.From the perspective of asset pricing,this paper systematically investigates the changes of investment and financing behaviors of enterprises under the condition of equity overvaluation and undervaluation,making up for the shortage of existing literature.In fact,in emerging economies with institutional transition,various systems are not yet perfect,investors' professional abilities are uneven,therefore mispricing is serious.To the extent,asset valuation skewness may have a more profound impact on corporate investment and financing decisions than traditional corporate governance,executive characteristics and other factors.Secondly,based on the view that the market is not efficient and the theoretical basis of behavioral finance,this paper studies the changes of investment and financing behaviors under the condition of equity mispricing,enriching relevant researches on the economic consequences of mispricing.Mispricing is a normal phenomenon in the capital market while the economies is transition.Existing literatures have made a detailed analysis and discussion on the factors affecting mispricing,but relatively few literatures focus on the economic consequences of mispricing.Almost all existing studies have pointed out that mispricing may cause adverse effects such as resource misallocation and decision deviation.Only a few literatures found that the advantages brought by mispricing from the perspective of industrial structure adjustment and financing constraint alleviation.To combine the leverage adjustment and the supply side structural reforms and innovation drives,industrial upgrading and high-quality economic development,this dissertation cares about corporate capital structure dynamic adjustment,innovation,mergers and acquisitions.In order to fully clarify the mispricing's positive or negative impact on the real economy development,which will be conductive to enrich asset pricing economic consequences research literature.Thirdly,existing literature studies on asset mispricing mainly focus on the overall degree of mispricing or just for the equity overvaluation,but few literatures examine the impact of asset mispricing from the two dimensions of overvaluation and undervaluation.This dissertation distinct market overvalued and undervalued,and along with the change of corporate equity financing costs,managers catering and external pressure theories,to empirical examines the mispricing influence on enterprises investment and financing behavior.This provides a good reference for the subsequent related literature about the valuation of the market and enterprise investment and financing behavior.In addition,from the perspective of rational catering channels and equity financing channels,this paper also discusses the effect mechanism of asset mispricing on investment and financing behavior.Existing literatures all believe that asset pricing bias may affect corporate behavior,but few literatures further explore the mechanism that may affect corporate behavior.At the same time,from the perspective of practice,the research in this paper helps regulators to further understand the impact of mispricing on the operation of real economy.And also provides a basis for them to formulate policies related to financial market reform.Lastly,through the analysis of factor that may causes mispricing,this paper tries to construct a theoretical analysis framework of the influence of mispricing on investment and financing behavior.Finance is the blood of the real economy,and serving the real economy is the first duty and purpose of finance.The existing literatures focus on the influence of mispricing and investment or the mispricing of financial,majority of them just considers one side of corporate decision,which is relatively scattered and lack of systematization.Based on the supply side structural reform and the background of financial services for the real economy,and combine with the information asymmetry,investors' irrational behavior theories,along with the enterprise market timing and managers catering behavior,logical deduction the inner mechanism for the mispricing and investment and financing behavior.And after that constructed a theory analysis framework to mispricing and enterprise investment and financing behaviors,which strengthen the capital market operation and the real economy development theory foundation. |
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