Research On The Impact Of Financial Flexibility On Corporate Investment

This paper takes the real estate enterprises as samples and researches on theimpact of the financial flexibility of real estate enterprises on investment.As the resultof the research,we know it is so important that real estate enterprises store thefinancial flexibility.Firstly,in the part of theoretical analysis, this paper referencespredecessor’s viewpoints to analyze the role of financial flexibility,through theintroduction of financing constraint theory,real option theory,the modified trade-offtheory and the modified pecking order theory.Secondly,this paper describes financialflexibility definition, measurement and impact on investment behavior.Thirdly,theindexes of financial flexibility are constructed and the comprehensive score of eachenterprise is calculated by factor analysis method.Fourthly,in the empirical study,Iselect the datas from2011to2013of133real estate enterprises from Shanghai andShenzhen stock A.And I construct a model of investment prediction which isimproved from Richardson model.The next,descriptive statistics and regressionanalysis are done to verify hypothesis.The conclusions are as follows:the correlationis positive between financial flexibility and investment;the correlation is negativebetween financial flexibility and the scale of the company;financial flexibility level ofstate-owned holding enterprises is higher than non state-owned enterprises;excessiveinvestment phenomenon prevails in the real estate enterprises and the correlation ispositive between financial flexibility and excessive investment.According to the research conclusions,put forward the following policyrecommendations:1real estate enterprises should establish a financial flexibilityindicator system, and then the financial flexibility index;2financial flexibility isremained at a moderate level which can make the enterprises get financial support andnot invest excessively;3improve the housing enterprises credit ability and givefinancial support;4the government should strengthen the supervision and guidance toenterprise investment.