Financial Ecological Environment, Financing Constraints And Capital Cost

The growing wealth of financial theory development and improvement, the cost of capital is always the core of financial theory. Its importance is unquestionable. The cost of capital is not only an important basis for choosing funding sources and determining funding programs, but also the main criteria for the evaluation of investment projects and investment decisions offs. In new areas associated with the cost of capital, in addition to research microscopic, but also involves the correlation between meso and macro fields. Chinese economy is in transition and an emerging capital market. The market is not yet mature. The regional economic development is uneven. In addition, the firm’s financing behavior is crucial for the company’s development. Financing constraints is inevitable for companies.Enterprises according to the financial environment in which to analyze the inside and outside of their own strengths and weaknesses, to understand the extent of financing itself and constraints, as well as beneficial to their own development and make investment decisions. At the same time, investors can determine the expected rate of return on its investments according to the environment. This can effectively guarantee the interests of the shareholders not infringed, and reduce cost information asymmetry and agency problems, help the efficient allocation of the resource.This paper studies the three aspects, first, different business enterprise in which the cost of external financing financial environment changes, the degree of financing constraints will vary. Second, the cost of capital levels will differ in the different levels of corporate financing constraints. Thirdly, in different degrees of financing constraints, the cost of capital to improve the financial environment will have any effect. This study provides empirical evidence,on the one hand, the role of the financial environment for corporate finance at ease constraints played; The other hand, financing constraints for different types of businesses, financial ecological environment to optimize the capital cost to provide enterprise-level effects microscopic evidence.