Information Disclosure And Financing Constraints

Because of the informational asymmetry, external financing and internalfinancing is no longer completely alternative, causing the external financing cost ishigher than internal financing cost for the enterprise. If the manufacturers andenterprises dried up all the fund before implementing a program which can bring themlucre, and the lucre are not sufficient to compensate for external financing costs, thefirm is considered to be financing constrained. Therefore, the information asymmetryis the crucial reason of the enterprise financing constraints. At the same time, thecurrent capital market development in China is not yet mature, which is one of thereason that cause the informational asymmetry, and under the conditions, the financialenvironment have great influence on the enterprise financing. As a result, to study theeffect on the enterprise financing constraint caused by the financial developmentsituation in our country is very important. There is an important hypothesis in NewClassical Economics, namely the “representative firm”, under this assumption,manufacturers and enterprises have no differences, it is not difficult to see, if all theenterprises had the equal access to capital market, then internal and external financingare alternative. But in reality, economic development in different regions is notbalanced, and there exist obvious differences in the degree of financial marketdevelopment. It is the differences that affect the enterprises financing greatly. Basedon the above two aspects, this article analyzes the way that the informationasymmetry and the regional financial environment imbalance to affect the financingconstraints. Due to the special institutional background in China, when we researchthe listed companies we can not run around an important factor－ownership nature,which also be included in the research of this article.Using the Shenzhen stock exchange unbalanced panel data from2005to2009and making the results of the evaluation of the listed companies’ informationdisclosure announced by the Shenzhen Stock Exchange as the alternative indicators ofthe information asymmetry degree, the article checks out the financial developmentdifferences of different regions and the effect on the enterprises financing constraintscaused by information disclosure quality of listed companies through testing the cashflow sensitivity of cash model. The results show that the listed companies of ourcountry are facing the financing constraints at large. The listed companies are verydependent on external financing. Most of the funds are obtained from externalfinancing; on the other hand, the frequent internal financing is only able to make up 1/5shares of the enterprise total financing showing our disadvantages at making profitwhich lead to the disability of meeting the demand of investment. Financialdevelopment situation of the region where the listed companies located affect thelocal enterprise financing constraint condition greatly. The developed financialenvironment can effectively alleviate the financing constraints, and the alleviatingeffect is more obvious for non-state owned enterprises. The high quality ofinformation disclosure can also ease the enterprises financing constraints andespecially in the advanced financial development regions, it will play a moresignificant role. This article uses the Euler equation investment model test the aboveconclusions and the results have no significant difference.