An Empirical Research Of Shandong Financial Development To Alleviate The Financial Constraints Of Firms

In 1950s, Modigliani and Miller proposed MM theory which is based on the assumption of perfect markets in which the cost of internal and external fund is equal. But in practice, because of information asymmetry between outside investors and company, the enterprise external cost is higher than the internal financing cost. In this case, the investment will be affected by financing constraints.The financial system is the organic composition of financial tools, financial institution and financial market. In the process of the dynamic variation of the financial system, the level of financial development improved. By expanding the scale of financial assets, speeding up the pace of innovation of financial tools, optimizing the financial structure, financial development will enhance the ability to serve the real economy, and optimize the environment of enterprise investment, broaden the financing channels, so as to promote business investment and the scale.Based on the theory of corporate finance and financial development theory, this paper analys the mechanism of the development of finance to ease financing constraints. The paper conducts a dynamic panel analysis of financial development on corporate financing constraints using panel data from Shandong Province listed firms during the period 2010--2013. Research results show that:first, the financing constraint problem is widespread in the enterprise of Shandong province. Secondly, the research in the relationship between the degree of financing constraints and enterprise heterogeneity found that:(1)The nature of property right affect financing constraints, compared with non-state-owned enterprises, state-owned enterprises are facing a higher degree of financing constraints; (2)The scale of the company affects the corporate financing constraints. Compared with large enterprises and medium-sized enterprises, small and micro enterprises suffer from a higher degree of financing constraints. Again, The degree of financing constraints of The Economic Circle of Capital City Group is higher than the Shandong Peninsula Blue Economic Zone and The Western Economic Zone. Finally, in the financial development to alleviate enterprise financing constraint degree differences found that:first, the non-state-owned enterprises and small and micro enterprise financing constraints get more apparent ease than state-owned enterprises and large and medium-sized enterprises. Second, the western economic uplift "ease of financing constraint degree" is higher than the other two economic zone. Based on the above studies, this paper give some suggestions,such as development financial intermediaries, actively accelerate the establishment of a multi-level financial system, promote financial development model to provide more help for enterprise development.