Research On The Influence Of Financial Flexibility On Investment Behavior Of Listed Company

"About Market,the only we can certain is its uncertainty",Lubin, a Finance minister of America, ever had such a brilliant summary about market. In recent years,with the higher degree of uncertainty of the internal and external environment, Financial Flexibility draws the special attention of the theory and practice. Majority of the CEOs consider FF as the most important when they make capital structure decision,a survey shows. Financial flexibility has the ability to" prevent" and "utilize" the " uncertain events ". we study examines the impact of financial flexibility on the investment of849non-financial listed corporate in our country effected by the2007-2008global financial crisis triggered by credit crisis of America.Just as the AFO (2010) do for examining the influence of financial flexibility in the Southeast Asian financial crisis on investment and on firm value. This study also choose (2004-2006) pre crisis and during the crisis years (2007-2008) as the research sample from HU and SHEN A share (2003-2008) of non-financial enterprises, according to three different standards,then all samples were divided into three groups (6samples)as financial flexibility during the crisis.First of all, the sample was analyzed with descriptive statistics, examining the variable mean changes of pre crisis period(PCD)and Crisis period(CD). Look directly the influence of financial crisis on China, to insure the study is meaningful. Then the sample of PCD and CD were analyzed with descriptive statistics and t inspection of the mean values;the mean inter temporal change t test to verify hypotheses; finally through multivariate linear regression analysis further observation financial flexibility on investment and on investment cash flow sensitivity.The main conclusions are as follows:First, the whole investment of sample firms declined,but firms that are financial flexibility prior to the crisis have a greater ability to take investment opportunities and have a less severe decline in its investment expenditures then non-financial flexibility firms. Second, the firms with different kinds of Financial Flexibility behave differently. Cash Financial Flexibility(CFF) enterprises utilize more cash, Debt Financing Financial (DFF)enterprises use more debt, the Third group namely comprehensive group(CDFF) use both cash and debt to invest.Third, investment of Financial Flexibility enterprises rely less on the internal funds with a lower investment cash flow sensitivity.