The company's investment behavior has been a hot of investment theory, and recently a lot of studies have shown that internal cash flow have an important influence on investment, that is investment-cash flow sensitivity. There are two different explanations on the existence of investment-cash flow sensitivity in the Academic that the financial constraints hypothesis which lead to under-investment and free cash flow hypothesis which lead to over-investment.The share-split reform have been began in our stock market on April 29, 2005 and completed basically so far. Its effectiveness has been a common concern in the academic and practitioners. What kind of change on the company's investment-cash flow sensitivity after the share-split reform?This paper learned from the advanced experience of western developed countries, combining the old papers and considering the unique context of the share-split reform in our listed companies, using the empirical analysis of the research methods, choosing A-share structure and electricity listed companies which accomplished the share-split reform from 2005 to 2007 in manufacturing industry as a research sample, according to the actual controller of the sample, divided into state-owned holding listed companies and private holding listed companies to compare, and analyze the influence of the share-split reform on the investment-cash flow sensitivity. First, the whole sample and sub-samples are descriptively counted, and then the indexes of the before and after share-split reform samples are tested by paired samples T test, then they are grouped and regressed, and finally analysis the empirical results and draw the following conclusions: there is the sensitivity between the company's investment and internal cash flow, and positive correlation between them; the company's investment-cash flow sensitivity weakened and the state-owned holding listed companies have larger scale than the private holding listed companies after the share-split reform; financial constraints are the main reason for the company's investment-cash flow sensitivity before and after the share-split reform, but the extent of financial constraints decrease after the share-split reform. Finally some improvements have been put forward on guiding the company's investment behavior and allocating corporate resources efficiently to enhance corporate value. |