The Empirical Study About The Effects Of Investment Level On Debt Agency Cost

In the daily manufacturing and operating life of the enterprises, their own capital always can not meet their demands. Investing business and financing business are participating in a very important role in the operating business of enterprises. There are two ways for enterprises to collect capital from outside. One is debt financing, the other is equity financing. The application of these two kinds of ways to collect money is limited by the situation of the enterprises, and will have an obvious different impact on the value of the enterprises. The value of enterprises can be enhanced by debt financing through its financing gearing effect and debt's contingent governance on investment, so debt financing becomes a vital way for enterprises to collect money. However, after obtaining loans, owing to stockholders' more knowledge about the company's inner information than the loaners and their intense feeling to maximizing their own utility, it is likely for the enterprises to violate the benefit of the loaners by performing the asset substitution behavior and the under investment behavior which will have a bad effect on the value of the enterprises. This paper tries to draw a conclusion whether or not the enterprises have performed the ineffective investment behavior and what kind of ineffective investment behavior different enterprises have by investigating the statistical relationship between the investment level and the debt agency cost of manufacturing enterprises, and the statistical relationship between the investment level and the debt agency cost among the high-growth enterprises and the low-growth enterprises which is classified according to the growth characteristics of enterprises, and offer the banks a direction on the supervision contents of the enterprises.