In recent years,the relationship between investment expenditure and internal cash flow becomes more and more popular. Because of imperfect capital market, agency problems, the influence of related factors such as information asymmetry, the enterprise’s external financing and internal financing cost presents the difference. And these factors also affect the dependence of the investment expense on internal cash flow.Today’s domestic and foreign research on the sensitivity between investment expenditure and internal cash flow has two explanations:the first one is the free cash flow hypothesis, internal agency problems between managers and outside investors; The second one is the issue of financing constraints, there is information asymmetry in capital market.Foreign research on the relationship between the investment expenditure and internal cash flow is quite rich, because the time is longer, the capital market standardization degree is higher. But the market is booming in our country, gradually moving towards maturity. But because of the existence of the special national conditions in China, the capital market also has its own characteristics.This article selects the listed on the Shanghai and Shenzhen 556 equipment manufacturing enterprises as samples, the time span from 2010 to 2013. Combined with China’s national conditions, choose the cash holdings and the classification standard, whether for the state-owned enterprise as a group and under the whole samples of panel data regression analysis, the sensitivity of inspection and motivation, to explore the relationship between investment expenditure and internal cash flow and the root cause of this kind of sensitivity.The research get the following conclusion:the enterprise’s investment expenditure and internal cash flow is significantly positive correlation. Internal cash flow will cause the increase of investment spending increasing or decreasing; State-owned enterprises and private enterprises investment expenditure and internal cash flow is significantly positive correlation between, but the state-owned enterprise is caused by information asymmetry is between the sensitivity, and private enterprises because of the free cash flow hypothesis makes the sensitivity between them; Has a high level of cash holdings of corporate investment expenditure and internal cash flow is significantly positive correlation between, and is caused by free cash flow hypothesis is only between the sensitivity, and lower cash holdings of companies there is no significant relationship between the two. |