Research On Effect Of Financial Restraint On Listing Corporation’s Investment And Financing Behavior

Since China implemented the reform and opening- up policy for 30 years, with our country’s macro financial policy changed, the survival environment that enterprises faced with also changed. As the embodiment of macro financial policy in this period, financial restraints were the macro financial environment that enterprises ’ development faced with in this stage. Investment and financing decision were important aspects of the management in the company, some studies used financing constraint to represent the financial restraint, then to make the research under the framework of financing constraint. In essence, the financing constraint was a kind of inherent defects of the market, which can not fully consider the impact of the macro financial policy to the corporation’s investment and financing behavior. Therefore, this article was from the perspective of financial restraint and researched the investment and financing behavior of C hina’s listing corporations. We not only looked forward to rich the further study that researching effect of the macro system on the investment and financing behavior of corporation, but also tried to provide suggestions for the system’s defects. To make the rental opportunities created by financial restraint can be shared more widely, to standardize the investment and financing behavior of the listing.This paper used method combining qualitative and quantitative analysis to research the effect of financial restraint on the investment and financing behavior of the listing. In the qualitative analysis, firstly, it introduced the core idea of financial restraint, reviewed and comprehensively commented on the literature about theory of financial restraint and enterprise ’s investment and financing behavior to find out the main points of this paper. Secondly, it analyzed the influence mechanism of financial restraint on the investment and financing behavior of the listing. Financial restraint policy effected on over- investment and under- investment through information asymmetry and corporate governance, and effected on capital structure and financing order through cost of agency and financing. Based on this analysis, this paper put forward the hypothesis. Finally, it reviewed and summarized the method of financial restraint index construction and relevant theory, summed up the previous experience and putted forward improvement measure to lay foundation for the following empirical analysis.In the part of quantitative analysis, this paper used the method of principal component analysis and panel data regression model. Firstly, according to the characteristic and the related resea rch results about financial restraint policy, combining with the actual research, it constructed index evaluation system of 7 indicators from 3 dimensions that included bank credit market, capital market and foreign exchange market. Secondly, it used princ ipal component method to analyze the data from 2004 to 2013 by using the STATA statistics software, and got the financial restraint index of China during this period, from the trend graph of the index, the trend of C hina’s financial restraint was fluctuate. Finally, it selected all A advocate board, small board and GEM listing corporations as the initial sample from 2004 to 2013, the dependent variables were over- investment and under- investment, the independent variables were cash flow and financial restraint index’s interactions, then it established the model of panel data regression. The empirical results showed that financial restraint became stronger, the over-investment behavior of the listing corporations, excepted for state-owned listing, would be restrained and under- investment behavior would be relieved. In addition, this paper respectively used interest bearing debt financing, equity financing, long-term and short-term interest bearing debt financing as the dependent variables, and used the financia l restraint index as independent variable to establish the panel data regression model about the financing behavior. The empirical results show that the stronger financial restraint policy cannot improve all listing corporations’ financing behavior, but these policies bring more financing opportunities for the state-owned listing.Finally, according to the empirical conclusion, it proposed the corresponding countermeasures and the suggestions. O ne was financial liberalization reform, this paper putted forward three major measures, the liberalization of interest rate, perfected capital market system and accelerated the convertibility of capital account. Another one was the reform of state-owned enterprises, mainly included two measures, consummating the policy of the state-owned assets management system and implementing modern enterprise system.