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Empirical Study On The Investment Cash Flow Sensitivity Under Financing Constraints-Based On The Comparative Analysis Between The State

Posted on:2014-06-24Degree:MasterType:Thesis
Country:ChinaCandidate:G X ZhaoFull Text:PDF
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A large number of empirical studies have shown that Capital market is not perfect in reality. In the market, information asymmetry and agency cost problem is widely exist, which Makes the enterprise has the higher external financing costs. Especially in China whose market is "emerging and transition", the external financing constraint problem in enterprise is more obvious. Because of the Special system background, state-owned companies and privately-owned companies have difference in the problem of the external Financing constraints. The financing constraint can also affect the company’s investment decisions. If external financing cost is much higher, the investment of the company will dependent on internal cash flow. At the same time, For nearly30years of the reform and opening-up in our country, although the capital market and the reform of state-owned enterprises is constantly groping forward, its development and the reform is still in its infancy. There are still many problems about. our country’s capital market and the development of state-owned enterprises. For "the Wuying case" as an example, as she can’t get the bank credit support for her industry expansion, then she turn to private investors, but the Immature policies cannot constraint and regulate the behavior of Wuying, which had a great risk. Therefore, under the background of the deepening market-oriented reform in our country, it is necessary to study the difference between state-owned companies and privately-owned companies about the Financing constraints. Also, the paper Consider the influence of financial development on the Financing constraints. In this paper, from the perspective of financing constraints, the state-owned listed companies and the differences between private listed companies is analyzed, and analyzes the financial market propulsive effect on two kinds of corporate finance. The meaning of this paper is it can provide some information and some help to deepen the reform of state-owned enterprises and deepen the financial market reform. This paper use two research methods, normative research and empirical study.Firstly, analyze the relevant theory. Then it is the empirical study. The research samples are the manufacturing listed companies which list in the Shang ha stock market and Shenzhen stock market from the year2007to2009.The financing constraint index is builded by binary logistic regression, and then with panel data to regression analysis. Empirical analysis studies the relationship between investment and internal cash flow sensitivity of the whole samples. Also it study the difference investment cash flow sensitivity between the state-owned listed companies and the privately listed companies. It studies the relationship between degree of financing constraints and investment cash flow sensitivity. Under the same degree of financing constraints, the difference between the state-owned listed companies and the private listed companies about the investment cash flow sensitivity. At last, this paper takes into account the financial development level, which will influence the financing constraint.This paper is divided into six chapters, the contents is as follows:The first chapter is introductions, which introduce the background of the research, the purpose and significance, the ideas and content structure as well as the methods and contribution in this paper.The second chapter is theoretical foundation and literature review. It includes the related theoretical foundation, the literature review and also comment from foreign and domestic.The third chapter analyses the financing situation in present about China’s listed companies. It mainly includes the external financing environment, as well as the investment and financing situation.The fourth chapter is the design of empirical research. It includes the definition of the concept, the measurement of indicators as well as the description of these assumes. Also it builds the research model and selects the sample dada.The fifth chapter is the analysis of empirical result, which includes descriptive statistical analysis, correlation analysis and empirical regression analysis.The sixth chapter is the conclusion and suggestions. It contains the conclusions of the research, suggestions as well as the limitations of this paper.After the research, the paper has mainly the following findings: The capital market structure in China is not reasonable. Also, the scale of the stock market and bond market is small, which limit the list company’s financing needs. In the bond market, the corporate bond’s development lags behind which seriously restricts the financing needs of the private enterprises.From the point of the new investment of fixed assets, the state-owned listed companies are significantly higher than the private listed companies from the year2007to2009. In the recent five year, these two kinds companies’ investment trends is sample, the investment amount is larger in2008and slowdown in2009-2010, but it has a small amplitude recovery in2011. The analysis can be seen that the influence of the company’s control nature on the enterprise investment decision is important. The private listed companies’ investment level and scale is smaller than the state-owned listed companies.Manufacturing listed companies in China have significant investment cash flow sensitivity, the investment have significant dependence on cash flow. By analysis the reason of the investment cash flow sensitivity, we found that the information asymmetry is the main reason both for state-owned listed companies and private listed companies. Degree of financing constraints and investment cash flow sensitivity is positive correlation, the lower the degree of financing constraints, the lower the investment cash flow sensitivity. On the whole, compared with the private listed companies, the state-owned listed companies has lower investment cash flow sensitivity, also it can illustrates that the state-owned listed companies have lower financing constraints.From the comparison of financing constraints, under the high financing constraints, the two types of companies have significant sensitivity of investment cash flow. To the listed companies under the control of the government and the listed companies under the control of the private, the sensitivity of investment cash flow is not apparently different, this shows that the external financing market in China likes state-owned listed companies blindly, for the state-owned listed companies of the poor performance, its external financing constraints still exist. Under the low financing constraints, the two types of companies also have significant sensitivity of investment cash flow, but cash flow coefficient of the two types of companies is apparently different, cash flow coefficient of state-owned listed companies is lower apparently than that of private-owned listed companies, this shows that under the low financing constraints, compared to private-owned listed companies with good performance, the external financing market likes state-owned listed companies with good performance better, this made cash flow coefficient of state-owned listed companies low.The development degree of the financial market-oriented and the financing constraints in the companies have significant negative correlation relationship, the higher the degree of financial market-oriented, the lower the degree of financing constraints. Compared with the state-owned companies, the financial market-oriented can significantly reduce the degree of the private company’s financing constraints.This paper’s main contributions:Use the comprehensive index and binary logistic method to build the financing constraints index, which avoid the limitations of a single index to measure degree of financing constraints; Group three samples-total samples, high financing constraints samples, low financing constraints samples-to discuss the difference between the state-owned listed companies and private listed companies about the cash flow sensitivities and financing constraints. The results show that there are specific differences between two companies, which can help identify two types of company development present situation; It is difference with others who also study the impact of financial development on financing constraints, this paper choose another method to study it. This paper put some variables into the FC equation, these variables are the market-MK, the dummy variable about different control of the company. In the form of the panel data, it can know how the variable influence the financing constraints, and what is the different influence to the different companies-the state-owned listed companies and the private listed companies. The approach is much more rigorous, which enrich the macroeconomic impact on listed company’s related research.
Keywords/Search Tags:Financing Constraints, Investment Cash Flow Sensitivity, State-owned Listed Companies, Private listed Companies, FinancialMarket-oriented
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