Free Cash Flow、Corporate Governance And Performance Correlation

Free cash flow in the business to occupy an important position,He not only liquidity but aslo paly a crucial role in the future development of enterprises.In recent years,domestic and foreign scholars on the use of free cash flow in the enterprise give more and more attention.China’s rapid economic development and equity restructuring of the social context,Huge free cash flow as a business retention in the agency business model,through the business game between the related parties,the business has a significant impact on performance.Broke through in recent years,China’s listed companies,especially the state-owned listed companies,are the prevalence of over-investment,serbice consumption,the fact that the blind to create the business empire,is not difficult to find the agency costs of free cash flow problems caused by the listed companies in China.As a continuation of free cash flow hypothesis of corporate governance will bring what kind of impact,the improvement of corporate governance constraints on the free cash flow management,what role have become scholars of common concern.The free cash flow in and of itself si not positive or negative "color",the key lies in the management of their corporate boards and the application.Based on the study of corporate governance indicators to verify the effectiveness of different corporate governance of companies is the use of free cash folw guidance an constraints play a certain effect,thus reducing the free cash flow to bring the agency costs and improve business performance.First,the paper on corporate governance and the related concept of free cash flow definition,and combing the basic theory associated with the free cash flow,such as principal-agent theory,agency cost theory.In addition an overview of existing research results free cash flow.Secondly,this paper describes the statistical analysis of China’s listed companies free cash flow of industry production industry level,a comparative analysis of the power industry,represented by free cash flow of monopoly industries.Again,this article from the Shanghai and Shenzhen-listed manufacturing companies as a sample of300randomly selected data,start from the two post office,the nature of equity,ownership concentration,independent directors and corporate governance,executive compensation and others,select the2006-2010data,after the share reform,the use of SPSS17.0software for data ananlysis of the relevant sub-regression.Emprircal study of corporate governance,free cash flow and the relationship between corporate performance.The study found:two sub-post office,state-controlled and non-state-controlled listed companies are not conducive to equity free cash flow through the high concentration of management and has a negative impact on future business performance.Finally,according to theoretical analysis and empirical research give some the corresponding level of corporate governance and macro-level policy recommendations.