Study On Influence Of The Relationship Between Investment And Cash-flow

The proposition of MM theory that create a beginning of study of the capital structure, subsequently , the capital structure theory develops maturely, in recent years, the financing decision-making play an import role in the enterprise managing finances, enterprise's investment and the cash flow relations under the financing constraints becomes the domestic and foreign research unceasingly the hot spot.In imperfect capital markets, due to asymmetric information, principal-agent problem and the problem of transaction costs and other factors, there are differences between the cost of capital from enterprise internal and the cost of capital from enterprise external, therefore, to raise funds for investment projects, to a certain degree the enterprise will depend on their internal cash flow. In addition , because of different enterprises by the external financing constraints in varying degrees, the investment dependent on the cash flow in different enterprises performance of different characteristics.This article take the sensitive relationship under the financial constraint between the investment in enterprise and the cash flow as the object of study, take the listed manufacturing industry of Shanghai and Shenzhen stock markets from 2003-2006 years data as the studies samples, combine with the reality of our country, selected the traditional classics financing restraint substitution variable–the fixed charge coverage as the classified standard of financial constraints , meanwhile selected property ratio of debt to net worth as the classified standard of financial constraints to study detailed the relationship between invest and cash-flow under diverse level of financial constraints with the help of the enterprise in fact of diverse level of financial constraints.This main research conclusion of this article includes:①speaking of manufacturing industry to be listed of our country, company's investment spending assumes the remarkable relation dependence with the internal cash flow, investments along with the internal cash-flow fluctuation, but corresponding fluctuation.②when carries on the classification by the fixed charge coverage as the financing constraint's substitution variable, the fixed charge coverage is lower, the financing constraint that the company received is stronger, the investment relies more on its internal cash flow.③when take the property ratio of debt to net worth as the classified standard of financial constraints , the property ratio of debt to net worth is higher, the financing constraints which the company received is stronger, company's investment depends more on the internal cash flow.