Investment In The Financing Constraints Of Chinese Listed Companies

In reality, It becomes one of the important issues under financing constraints on investment behavior of companies in academic circle through the negation of the theory MM.In the incomplete capital markets, the cost of external financing is different from internal financing because of the asymmetric information,agency problems,transaction costs and so on. The corporate investment decisions are affected.This thesis combines theoretical analysis with empirical research. Concerning the reality of our county,The author selects 354 listed manufacturing companies from 2007 to 2008 as research sample and chooses the fixed charger coverage and company size as the standard of financial constraints grouping to study detailedly the relationship between investment and cash-flow under diverse level of financial constraints with the help of descriptive statistic,analysis of variance and multiple variable regression.The purpose is to disclose the sensitivity relationship about cash flow and company investment in the financing constraints.The results are as follow:(1) In relation to the sample Overall, corporate investments are sensitive to the internal cash flow;(2)The degree of this sensitivity in deeper when the financial constraints measured by the fixed charge coverage are more serious;(3) By firm size category, the study found that small companies investment spending is more dependent on internal cash flow relative to large companies. This is consistent with our assumptions;(4) As an inherent motivation, asymmetric information problems and agency problems impact sensitively on China's corporate investment and cash flow .Finally, this paper puts forward some recommendations as references to listed companies.