A Research On The Impact Of Debt Financing On Investment Behavior For Listed Companies

The correlative relationship between investment and financing is an important issue in corporate finance. According to agency costs theory, information equilibrium theory and control rights theory, the impact of debt financial on firm investment has both negative effect and positive effeet.The positive effect means that leverage is one mechanism for overeoming the overinvestment problem where the conflict is between the shareholders and management. The negative impact is that debt reduces the incentives of the shareholder-creditor coalition to invest in positive net-present-value investment opportunities,which creates asset substitution and potential underinvestment.Therefore, the analysis of financing and investment behavior of enterprises is of great significance. Based on previous academic research and status of ownership structure, this paper makes a research on the impact of debt financing on investment behavior from the perspective of ultimate control,so that we could have a more deeply research on this question.Content of article is as blow:PartⅠ, Introduction. Introduce the background, significance and methods of research and then summarize the main points of view from domestic and overseas scholars. PartⅡ, Review and comment of the related theory:First, introduce the theory of corporate finance and related concepts, pointing out the possible ways of debt financing impact on investment behavior. Second, analyze the theory of relationship between corporate investment and financing, including related theory and irrelevant theory. Third, profoundly analyze three kinds of effects of debt financing on investment behavior:asset substitution, underinvestment and contingent governance. The final part is existing condition analysis. Based on the perspective of ultimate ownership, we analyze the real situation about the effects of debt financing on investment behavior. Part III, empirical analysis. Using of data of listed companies, firstly, describe the relationship between investments and financing from the overall sample by the way of descriptive statistics and correlation analysis. Secondly, we analyzed the whole samples by multiple regression analysis making use of statistical software SPSS 13.0. Finally, based on the difference of ultimate ownership, we divide the sample into two groups:specifically discuss whether the differences of ultimate ownership have different impact and how to play this role. PartIV, Conclusion. To summarize this study, give recommendations and suggestions, and then propose the study prospect of further research direction.The character and innovation of this paper is below, based on our country's special conditions, shares of listed companies are relatively concentrated because of equity division, which led to the phenomenon of private benefits of control. In the view of the ultimate ownership, this paper discusses whether private benefits of control continue to exist, and whether debt financing could inhibit the non-efficiency investment behavior of ultimate controllers, who pursue of private benefits of control, from the perspective of ultimate control by making use of latest panel data of listed companies as samples between 2005-2008.In the process of empirical analyse, we put the samples into two groups to have a comparative analysis:ultimate control of stae and ultimate control of private, according the nature of ultimate controller.Then we could research whether the difference of ultimate controller result in the different influence of liability on the investment behavior. This classification is more clear and rigorous compared with cassification from the equity and the conclusion of the study is more practical significance.