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Research On Financing Constraints And Uncertainty To Business Investment

Posted on:2011-01-14Degree:MasterType:Thesis
Country:ChinaCandidate:Y Z WangFull Text:PDF
GTID:2189360305451399Subject:Accounting
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The sensitivity of investment and cash flow is the hotspot of the modern western financing theory research. Usually, the undulation of cash flow will affect investment scale of a corporate. There are two theories that can explain the main causes of sensitivity of investment and cash flow:information asymmetry theory and agency theory. Information asymmetry theory thinks that the main cause of sensitivity of investment and cash flow is that inside and outside of corporate possess different information, and this makes corporate prefer interior financing to exterior financing, and causes the positive relativity between investment and cash flow. The agency theory thinks that because of the agency problem between management and shareholders, management of corporate may invest some projects with negative present value in order to increase personal benefit. This paper analyzes the relation between financing constraints of China's manufacturing listed companies and sensitivity of investment--cash flow, and on this basis, we introduce the uncertainty and analyze the impact of uncertainty on investment, especially uncertainty in different financing constraint, in order to supply a view on investment decision of China's manufacturing listed companies.In this paper, based on related research at home and abroad, first of all we analyze the sensitivity of investment and cash flow from two kinds of theories, that is, information asymmetry theory and agency theory, and compared the similarities and differences between two theories. Then we make an empirical research model suitable for the actual situation of China's listed companies based on the classical model, acceleration model and the Tobin's Q model. The empirical models are used to examine the existence of sensitivity of investment--cash flow, while cross examination is to answer under-investment or over-investment in manufacturing listed companies and the uncertainty boosts investment or inhibits investment under different financing constraints. After the establishment of an empirical model, this paper researches how the uncertainty, sensitivity of investment-cash flow affect the investment based on the data on manufacturing listed companies during 1999-2008. We make ZFC by Slack/K, CF/K, WA/K, NI%, PR, SG, DR. First, this paper tests the relationship between investment and cash flow with all the numbers of China's manufacturing listed companies, and if the uncertainty strengthens or weakens the relationship between the two. Then we divide all companies into financing constraints lighter, financing constraints middle, financing constraints heavier following payout ratio, asset-liability ratio and ZFC, what's more, linear regression analysis tests the relation of financing constraints and sensitivity of investment--cash flow, the impact of uncertainty on investment in China's manufacturing listed companies. Now this paper reaches the following conclusions:(1) investment correlates positively with cash flow in China's manufacturing listed companies; (2) as whole, there is the phenomenon of excessive investment, but a little discrepancy in different financing constraints; (3)according to payout ratio, uncertainty has negative correlation with investment, while according to asset-liability ratio and ZFC, uncertainty and investment is U-type relationship; (4)uncertainty will inhibit over-investment in the financing constraints lighter, and will boost under-investment in the financing constraints middle and financing constraints heavier.
Keywords/Search Tags:Financing constraints, Uncertainty, Sensitivity of investment-cash flow, Over-investment
PDF Full Text Request
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