A Study On The Impact Of Debt Maturity Structure On Investment Behavior Under Internal Governance

Financing and investment decisions are the two most important financial decisions of corporates, financing decisions mainly to solve the source of funding for corporates development, and investment decisions are concerned about how to make the efficient allocation of resources, these two are indispensible and play a part together. Nowadays they are of great significance for corporates’ future development and operation status, thus attracting the attention of scholars and experts at home and abroad. In financing process, corporates should not only judge and balance the proportions of bond financing and equity financing, but also consider the debt maturity structure. It was found by Western scholars that corporates are able to control the non-efficiency investment actions generated from the conflicts of interest between shareholders and creditors or shareholders and managers through shortening the debt maturity structure. However, because of the special political background and economic environment, these factors make the internal corporate governance structure in China is different from the western developed countries, the applicability of this finding on China’s listed companies still need to be tested in the real circumstance.In this article, the author will analyze the relation between debt maturity structure and corporate investment. On the basis of teasing domestic and foreign scholars’ findings in the examination and influence mechanism of these two factors,by choosing between 2011-2013 listed companies in Shanghai and Shenzhen A-share listed companies in manufacturing 1117 financial data for the study, build a multivariate regression model, where the independent variable is debt maturity structure, dependent variable is corporate investment, three controlled variables are growth opportunity, cash flow and capital structure, to come to a scientific conclusion.The research result shows that at first, generally debt maturity structure and corporate investment are of negative correlation. Second, from the perspective of corporate internal governance, the author separates those corporates intotwo-member groups and conducts the regression analysis according to the ownership structure, whether managers have shares and whether the functions of CEOs and presidents are combined. The result illustrates that the relation between debt maturity structure and corporate investment is not notable in China’s state-owned corporates but is of obvious negative correlation in non-state-owned corporates; This negative correlation shows salient in corporates where managers have shares and the functions of CEOs and presidents are combined. In accordance with above-mentioned information, debt maturity structure and corporate investment are in negative correlation in China’s listed manufacturing corporates. However, in state-owned corporates, due to the soft constraint of budget, short-term debt does not perform its duty in controlling insufficient excessive investment. Besides, managers’ stock ownership and function separation of CEOs and presidents relieve the pressure of over investment. At last, according to the findings, the author is going to put forward useful suggestions for corporates.