| Financing and investment are two basic financial activities in financial management, they are both closely related to the movement of funds of enterprises. Generally speaking, according to development strategy, enterprises need raise the developing funds through certain channels and financing methods of financing, and then ultimately translate into capital by investment activities. In this process, on the one hand financing provide a source of funds for investment activities of enterprises, on the other hand, There are laws of any financing activities, capital cost and using restrictions and other conditions of constraint, both of which will eventually have impact on investments. From the perspective of investment behavior, financing must be the starting point of effective investment demand, which may make a reasonable allocation for the financial resources for development of enterprises, and investment decision have impact on the enterprise risk management, profitability etc. So it can be seen that they are the two basic and important financial events.Enterprises can not develop without the two basic financial activities:finance and investment. They are not isolated but both closely related to the movement of funds of enterprises in financial management activities. Earlier studies about the relationship of them, the research scholars establish perfect capital market assumptions, therefore, they concluded that finance and investment are independent. Later scholars have gradually relaxed the assumptions of the study, so financing and investment behavior has been linked closely. As an important source of funds, the relationship between liabilities and corporate investment has gradually entered into the academic horizon.Refering to the existing literature, scholars have mainly explained the relationship about the debt financing and corporate investment behavior by pricipal-agent theory, asymmetric information theory. According to agency theory, when the shareholders and management have the same interests, The conflict of interest of creditors and shareholders will cause a asset substitution and underinvestment. When the shareholders is inconsistent with the interests of management, debt financing can prevent moral hazard and adverse selection, reduce shareholder-manager agency costs and inhibit the excessive investment behavior of management.In addition, different debt maturity structure is also inconsistent on the impact of investment. The classical theory has made a great contribution for the relationship research between debt financing and the business investment, but also on financial management practices of great significance. After flip through the literature, although we believe that the classic literature has some explanatory power, these studies is to establish the basic on the relatively perfect market capital and equity scattered in the west, These research findings have some explanatory power on China’s investmentand financing behavior of listed companies, that remains to be further explored. Although some scholars had a rich research based on institutional background in our country, and obtained some of the consistent conclusion, such as the company’s debt levels negatively correlated with the level of investment; the proportion of short-term debt is relatively large, short-term debt greater restraints on investment in the debt maturity structure and so on. However, these researchs still lacks a general analytical framework for the relationship between debt financing to business investment, and needs further understanding. Meanwhile, according to the current situation of corporate financial management activities in our country, the central enterprises depend on the advantage of their resources and monopoly advantages, they own huge cash flow, moreover,they have a convenient platform for financing, debt financing constraints is small. They gradually invest to the real estate, finance and other areas. In contrast, Equity financing has more stringent conditions for some private enterprises, Debt financing mainly depend on bank borrowings, they are not so smooth financing. From an investment point of view, state-owned enterprises do not have the unique advantage of the resources and policies,coupled with relatively more difficult to finance, cash flow is not sufficient, investment direction and investment are subject to certain restrictions. Based on existing research and practice of financial management of some phenomena, we have established the research direction and ideas. The general content of this study is:The first chapter is an introduction. There ia a brief overview of the topics of the background, research significanced, main ideas and methods used in the study. This part is a brief overview from the selection of subjects to study the contents of the article, it shows the overall structure of the article.The second chapter is a review of existing literature.We have a simple and review about relationship between debt financing and corporate investment literature study. We expounds many research of foreign and domestic scholars in this area. We are three main aspects to sort out the literature, these three levels are: shareholders-creditor agency cost effects of a conflict of interest; governance in debt financing; the relationship between debt maturity structure and investment. Through the review of the literature, we find:considering to the specific institutional environment for listed companies in China, that is an important research directionin the course of the study.so we launched this as a starting point for our research.The third chapter is a theoretical analysis for the relationship between debt finance and investment. After having research starting point, we need analyze theoretically that the debt financing have impact on the scale of the business investment, in order to make our research more explanatory power, the article introduct simplely to the theory involved in this research, which provides theory of evidence for the research, but also which is a simple review for the theory of investment and financing company. Through a review of theory, we found that Scholars have a deepening understanding of agency theory,they have gradually gone to the research about the conflict of interest of major shareholders-minority shareholders from the conflict of interest for shareholders-creditors, shareholders management. For the investment theory, the conditions of the study hypothesis are gradually relaxed, and Scholars gradually add the information asymmetry, transaction costs and other practical conditions to study.The fourth chapter is the design part of the empirical research.we integrate specific institutional context of listed companies in our country, this paper put forward three hypotheses:That the expected relationship between business investment and debt financing for the overall sample companies; and on different complexity pyramid holding structure, debt financing is expected to impact on investment; the ultimate controller of the different nature, the relationship between debt ratio and the expected investment. To verify the hypothesis, we selected the A shares listed manufacturing companies in China for 2007-2009 as the research sample and definied Variables,and established a simple linear regression model.The fifth chapter is part of regression analysis of the results. To verify the hypothesis, we examines the relationship between debt ratio and investment group by all samples, the different nature of the ultimate controller, the complexity of the pyramid level. Specifically, though the data descriptive statistics, correlation analysis of the basic characteristics of the sample, we have a general understanding, then use the mathematical model for panel data regression analysis. In the empirical analysis, we mainly use Eviews3.1 for data regression analysis.Chapter VI describes the conclusions of the study and research inspiration. Though statistical tests of regression results, we find that:the debt ratio have a significant negative correlation to scale of investment for the overall sample of listed manufacturing companies. In accordance with the level of complexity of the pyramid in the group test, debt ratio have a significant negative correlation to scale of investment for a sample of the pyramid complex hierarchical structure, the result is contrast with the expecteds of the hypothesis, that the leverage effect of debt financing does not lead to excessive investment. Simple structure for a sample of the pyramid level, the relationship between the proportion of debt and investment is significant negatively correlative, indicating that debt financing can still play a role in inhibition of over-investment, and according to the regression coefficients, the group of complex pyramid level have more sensitive than the other group. According to the nature of the ultimate controller of the group test, the ultimate controller of the state-owned listed companies, the existence of the pyramid structure, may make the government reduce administrative intervention in the enterprise, corporate financing and investment decisions will be more rational, so debt ratio is negatively correlated with the investment scale;for the ultimate controller of the nature of non-state-owned listed companies, There is no evidence that pyramid structure is a internal validation of alternative mechanisms for financing platform, so we obtain the opposite conclusion with the expectations hypothesis, that debt ratio is negatively correlated with investment. Based on empirical results, we propose some advices, for example promating development of corporate bond market, strengthening creditor protection mechanism, improving the bankruptcy system in China and other aspects of policy recommendations. This paper has been drawing on the classical theory, considering to the general shareholding structure of the pyramid equity of listed companies, we constructed theory framework based the conflict of interests of shareholders-creditors and the divergence of interests of ultimate controlling shareholder-minority shareholders for our research. At same time,we examines the relationship of debt financing and the scale of corporate investment group by level of complexity of the pyramid and the nature of the ultimate controller. These are the largest characteristics of the paper. Of course,there are many deficiencies on the research process, mainly as follows:liability relates only to the total level of debt, without debt maturity structure, debt Source; there is a certain measure of irrationality for investment indicators; we have not taken into account the different stages of development;study is limited in the manufacturing industry, so the conclusion has some limitations. |
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