An Empirical Study Of Financial Flexibility And Investment Behavior Based On The Gem Data Analysis

Financial flexibility is a kind of capabilities to deal with the future uncertain matters which can adjust and mobilize enterprises resources, rationally use the cash reserves and the remaining debt capacity, control the cash flow on different time periods. Keeping financial flexibility has been taken more and more seriously by executives. Nowadays, our country enterprises are facing turbulent and complex economic environment. Enterprises maintain appropriate financial flexibility is essential. Because, when enterprises are facing opportunities and challenges in the uncertainty of the future, it can help enterprises to cope and to ensure a reasonable level of investment companies.This paper aims to study the effects of corporate investment behavior from financial flexibility and different sources of financial flexibility. Besides, it also aims to study how flexible financial impact on business investment cash sensitivity. First of all, combine the literature. Based on the literature, we choose the reasonable measurement methods what combine the cash flexible and debt flexible. Second, Assumptions made on the basis of relevant theories. Next, the data were collected for empirical research. Finally, analyze the reason of the empirical research result and putting forward the proposal.The core of this article is in the research of flexible financial effecting on enterprise investment behavior when considering the influence of life cycle factors and industry factors. That is why this paper chooses the GEM data. By the combination of normative research and empirical research, this article concluded that firstly, financial flexibility plays a catalytic role on investment behavior of the GEM companies. Secondly, cash flexible spending more significant role to enterprise’s investment. The last one, financial flexibility weakens investment cash sensitivity.In summary, this study has some practical significance for GEM companies to maintain reasonable financial flexibility and promote the level of companies investment. The final results of the research are that the first, financial flexibility of GEM listed companies promoted investment behavior. The second, the cash flexibility promoted more obvious role on enterprise investment expenditure. The last one, financial flexibility of GEM listed companies reduce the investment cash flow sensitivity.