Empirical Analysis Of The Impact Of Debt Financing On Non-efficient Investment Of Private Listed Companies In China

The thesis studies, under the frame of the theory of debt agency cost and information asymmetry theory, the impact of debt financing on non-effective investment activities which based on the institutional background of Chinese private listed company. Taking the data of 102 private company listed in Shenzhen and Shanghai stock market as the researcher examples, the present thesis proved the influences of the debt, the maturity structure of debt and the source of debt on non-effective investment activities. The researcher results indicate that over-investment and non-efficient investment are a common problem among private listed companies; although in general debt financing can inhabit over investment through contingent governance function, it cannot restores the underinvestment. After subdivision of the maturity structure of debt, short-term debt can inhibit overinvestment and non-efficient investment activity; whereas long-term investment occupies a small proportion in debt structure, therefore, it has no effect on Non-efficient investment activity. By subdivision of the source of debt, By effect the contingent governance function of debt, Over-investment activities can be inhibited by bank debt; and Non-efficient investment activities can be inhibited by commercial credit which plays the debt governance function. At last, the present study will compare the researcher conclusions with that of state holding listed companies, by analysis the reasons concerned about the research outcomes, the author will put forth some policy-based suggestions on how to better bring governance function of debt into full play.