Financing Constraints, Shareholding Structure And Cash Flow Sensitivity Of Cash

Company financing constraint problem is one of the important content of company financial research field in recent years, domestic and foreign research mainly from the Angle of cash flow sensitivity of investment to analysis the company’s financing constraints problem, for from the Angle of Cash Flow Sensitivity Of Cash to analysis the company financing constraint problem is still in the testing phase, namely whether the Cash Flow Sensitivity Of Cash could explain the financing constraint problem of enterprises.Cash Flow Sensitivity Of Cash refers to the degree of cash holdings dependent on the enterprise internal cash flow. If Cash Flow Sensitivity Of Cash is high,it means the cash that enterprise holdings mainly comes from internal cash flow, further illustrates the enterprise has external financing constraint problem; If the Cash Flow Sensitivity Of Cash is low,it means the enterprise is dependent on the internal cash flow slightly, also indicate that the enterprise external financing is relatively easy, its financing constraint problem is not obvious.Based on China’s manufacturing listed companies’ data during2008-2011as the research sample, using interest coverage ratio as the standard of financing constraints, this article divides the sample companies into two categories:the company has financing constraints and the company without financing constraints, examines the differences of the Cash Flow Sensitivity Of Cash of the two types of company, further tests the Cash Flow Sensitivity Of Cash as the standard for the financing constraints hypothesis. The results show that the Cash Flow Sensitivity Of Cash may explain the financing constraint problem,the higher degree of Cash Flow Sensitivity Of Cash, the more serious problem of its financing constraints, the lower level of Cash Flow Sensitivity Of Cash, its financing constraint problem is not obvious.On the basis of the Cash Flow Sensitivity Of Cash used as the standard to test company financing constraints, further investigate corporate financing constraint problem under different ownership structure, specifically, divides the sample companies into state-owned enterprises and non-state-owned enterprises to examine the problems of financing constraints between them according to the nature of the equity;and divides the sample companies into powerful shareholder and equity separation according to the ownership concentration to study the problems of financing constraints between them.The research results show that the Cash Flow Sensitivity Of Cash of state-owned enterprises and non-state-owned enterprises is not significant different, that is there is no significant difference the two groups of enterprises’ financing constraints, this result may be due to the industry characteristics of manufacturing listed companies of China.On the one hand, manufacturing enterprises are important industries of the national economy, influencing many aspects of the national economy, the government may give more support for all aspects of the industry because of this; On the other hand, the manufacturing listed companies of our country mostly come from state-owned enterprises reform, still have administrative connections with government,which also makes the manufacturing listed companies have little difficulties in the process of financing. At the same time, by studying the different equity structure of listed company, can be concluded that equity concentration are negatively related with cash, and the Cash Flow Sensitivity Of Cash of equity concentration of enterprises is smaller than diffuse ownership enterprises, which means that the financing constraint degree of equity concentration of enterprise is smaller compared with diffuse ownership of enterprise. This result may be due to the reason that it has support of strong stock holder of companies with high equity concentration. As a result, there will be big shareholders’ funds to enter when enterprises have financing constraint problems, so this kind of companies have small degree of financing constraints.Finally, according to the research conclusion, we can put forward three countermeasures for enterprise financing constraint problem. Namely:1, continue to deepen financial reform, improve the multi-level capital market.Our country enterprises’ financing is still mainly based on the indirect financing such as bank loans currently, the proportion of direct financing is not high, so companies still have prevalent financing constraints problems.To broaden the financing channels,we shall establish a multi-level capital market, strengthen the construction of capital market, especially the bond market.2.Promote the reform of corporate governance, establish effective internal supervision system. We need to strengthen the construction of the board of directors and board of supervisors, through effective supervision of the Board of Supervisors to reduce agency costs of enterprises.