The Related- Research Of Corporate Debt Financing And The Scale Of Investment

In the context of the international financial crisis, it is a great significance to research the correlation of debt financing and the size investment. Traditional financial theory suggests that there is no correlation between corporate debt financing the scale of investment, regardless of how the financial situation of enterprises, as long as companies with good investment opportunities can be raised to the appropriate funds to meet investment needs. Modern financial theory is based on principal - agent theory and the theory of asymmetric information considerations, suggests that the impact of corporate debt financing has great impact on enterprises investment. In one hand, debt financing of the conflict caused by shareholders and creditors, results in insufficient investment or asset substitution; the other hand, debt financing led to conflicts between shareholders and managers, causes over-investment. As the pressure of debt servicing liabilities on a regular period, it can reduce over-investment or asset substitution to play the role of the management; corporate debt financing can also give information to external investors about the financial health of enterprise to reduce the asymmetric information between companies and investors to protect the interests of inverstors. In addition, the maturity structure of corporate debt financing will have an impact on business investment. due to the regular debt service, so that enterprises of short-term debt are facing greater pressure on liquidity and refinancing pressure. in order to maintain solvency and avoid bankruptcy, general corporates will not use short-term funds to invest in high-risk projects, which forced the shareholder / manager to control risk-constrained self-desire; debt from different sources will lead to different restrictive provisions and penalties on shareholders from creditors, and thus the constraints on the role of investment will produce different results. the above-mentioned theoretical point of view of domestic and foreign scholars are not consistent. On China's actual situation, the research of this subject in order to better play the governance function of debt and promote investment in enterprise efficiency, improve enterprise capabilities to resist financial risks.In this paper, recalled domestic and foreign-related research literature, based on the use of micro-economic theory and agency theory to explain impact of corporate debt financing on the scale of investment. The use of Shanghai stock market from 2006 to 2008 A shares of 345 manufacturing enterprises of the 1358 group of sample data, in the control of Tobin's Q, sales revenue and cash flow, which affect the investment , and other variables, based on debt financing and investment scale of study correlations. Obtaining a significant negative correlation between the two. Based on business growth, separate samples in two groups.in high-growth corporaters liabilities financial shows inhibition on the scale of investment, while in the low-growth potential liabilities of the sample group showed the role constraints on the scale of investment. comparated to high-growth enterprises, in low-growth enterprises, the impact of debt on the scale of investment to bind more obvious. It also verifies debt financing impact on the scale of investment based on different controlling shareholder of companies. By examining the maturity structure of debt find that comparative to the long-term liabilities, short-term liabilities curb on over-investment behavior of enterprises and asset substitution behavior is more apparent; studying the sources of debt, commercial credit has played an more inhibitory effect on the investment scale, comparated to banks borrowing because of the role of constraints and debt repayment mechanism, imperfections cause the size of bank loans for investment did play its due important role. Based on impact of corporate debt financing on the scale of investment for both two sides of the role, corporations should pay attention to balance the constraints on the role of over-investment, but also should face liability constrain for effective investment, while improve the debt contract, to improve the governance role of debt financing.