The Impact Of Environmental Uncertainty On Investment Efficiency In The View Of Financing Constraints

As one of the three most important financial decisions, corporate investment decisions affect the corporate future earnings, thereby affecting the company’s own value. The higher the investment efficiency is, the greater the enterprise value is. Classical financial theory suggests that capital market is perfect and that investment decisions are only affected by their investment needs, regardless of its capital structure. Actually, financing constraints affect corporate investment decisions. In China the state-owned companies have low financing constraints and non-state-owned holding companies have severe financing constraints. In addition, there is an interval between capital input and investment income. Longer time means greater investment risk of environmental uncertainty. The investment behavior will produce deviations.First, this paper theoretically researches on financing constraints, environmental uncertainty and investment efficiency. By reviewing the previous researches on the relationship among these three factors, this paper finds no researches on these three factors together. Therefore, this paper puts forwards hypothesis after theoretic analysis, adopting regression model to test whether environmental uncertainty will have an effect on investment efficiency under the condition that financing is constrained. This paper also test the influence on the enterprise value brought by inefficient investment, in order to seek ways improve investment efficiency.Then, this paper selects A-share companies listed in Shanghai and Shenzhen stock market from2007to2012as research object. Calculating the investment deviation degree by Richardson model to measure the investment efficiency, taking the nature of control shareholders as financing constraints, operating income standard deviation as environmental uncertainty, Tobin-Q as enterprise value, this paper tests the relationship among the four factors, and the result shows that high environmental uncertainty leads to low investment efficiency with no significance. This paper also reveals that state-owned companies tend to invest insufficiently compared with non-state-owned companies.Meanwhile, state-owned companies invest more efficiently than non-state-owned companies under high environmental uncertainty. Non-state-owned companies’investment deviation caused by environmental uncertainty has more influence on enterprise value than state-owned companies.