Study On Investment Behavior Of Enterprise Free Cash Flow Constraints

As the imperfections of capital market, managers faced a practical problem of Financing Constraints in corporate investment decisions. In the theoretical world, the issue of investment-cash flow sensitivity is a hot topic for the academic community. Scholars studied the internal cash flow impact on investment decision-making behavior from different aspects, analyzed the existence of inefficient investment and the. formation of motivation etc. In this paper, from a new academic perspective——the enterprise life-cycle perspective, to study the behavior of free cash flow constraints on enterprise investment.First, on the basis of theoretical analysis, this paper set relevant variable targets, which have a scientific division of the listed companies for the six life cycle stages:growth, adolescence, maturity, aristocracy, recession and metamorphosis.Secondly, the sample is China's Shanghai stock exchange and Shenzhen stock exchange for the period of 2002-2008,37 listed companies in electric industry. Making an empirical analyzing in present free cash flow characteristics, which at different stages of the life cycle of listed companies.Finally, treat business life cycle stage as explanatory variables, modifying Vogt investment classical model to multiple regression analysis of the corporate free cash flow and investment behavior significantly related to sexual relations.The results showed that:in the six life cycle stages of corporate, there is a significant linear correlation between free cash flow and investment behavior. In growth stage FCF is negative, INVEST value the highest; In adolescent enterprises, FCF up and down changes in 0, or positive or negative, INVEST value higher; In mature enterprises, FCF is positive, INVEST value middle; In aristocracy Enterprises, FCF is positive, INVEST value low; In recession enterprises, FCF is negative, INVEST value the minimum; In metamorphosis enterprises, FCF is positive, INVEST value lower.In this paper, based on previous research, I put forward my own new perspective. To the process of technological change in the electric industry Listed Companies, provide a scientific reference for the relevant manager about investment decisions and corporate governance.