| With the speeding up of globalization, the environment of enterprise management showed uncertainty characteristics stronger and stronger. The adjustment of economic policies, inflation, etc all drastically affects the business environment, and there are special environment of policies in our country and facing the reform trend of the economic transformation, companies face more complex economic environment. And the concept of financial flexibility is on the basis of uncertainty, that means by keeping a certain financial flexibility to cope with the adverse impact of future, seize the favorable investment opportunities. The existence of asymmetric information and imperfect capital market in our country make the internal and external financing costs of enterprises different. Therefore, in order to cope with risk of financial distress brought by the uncertainty of business environment, to reduce the degree of financing constraint problems,and in a timely manner to provide financial support to investment demand, and improve enterprise performance, studying how to keep modest financial flexibility to play a valuebale role of financial flexibility is an urgent problemneed to consider and solve when enterprises carry on the accounting policy choice.Thesis adopt the method of combining theoretical analysis and empirical test. On the basis of the review of past research, thesis analyse the current theoretical basis. With the data of Chinese listed companies as research samples, the paper empirically test by using descriptive statistics analysis, correlation test and multiple regression analysis.On the empirical part, the paper puts Shanghai and Shenzhen two cities listed non-financial companies from 2007 to 2014 as research samples. First of all, the paper inspects the inverted u-shaped relationship between the financial flexibility and corporate performance.Secondly, the paper packets samples in accordance with the actual controller and the investment opportunity,then tests different samples. The study finds that:(1) the relationship between the financial flexibility and corporate performance expresses inverted u-shaped characteristic. (2)according to the nature of the actual controllers, samples are divided into state-owned and non-state-owned listed companies. Based on that, results show that the state-owned listed companies reach equilibrium faster, the inverted u-shaped curve of non-state-owned listed companies is more gentle. (3)When companies face different investment opportunities, financial flexibility plays a better role to companies which face more investment opportunities, and the inverted u-shaped curve is more gentle in samples with more investment opportunities.Above results show that Chinese listed companies generally maintain certain level of financial flexibility, but on the whole the financial flexibility level is low,even financial flexibility level of some’ companies is negative. When the level of financial flexibility is low, positive effect from financial flexibilityhold is on the dominant position. Maintaining a certain level of financial flexibility can ease the financing constraint problems under the asymmetric information,reduce the cost of financing, aviod finacial distress and when there are investment opportunities in enterprises, maintiaing financial flexibility can aslo satisfy the investment spending, and seize the investment opportunities.But when levels of financial flexibility are higher and higher, negative effect of financial flexibility gradually occupy the dominant position. That means excessive financial flexibility is harmful for business performance. The reason is that excessive financial flexibility aggravates principal-agent problems, and positive effect from financial flexibility is difficult to offset the agency costs. Therefore, the enterprise should keep financial flexibility level under equilibrium to develop enterprise performance combining with the characteristics of itself. The interval of positive effect from financial flexibility is shorter in state-owned listed companies, namely non-state-owned listed companies need to keep a certain more financial flexibility. Companies which face less investment opportunities, maintain excessive financial flexibility is easier to induce the principal-agent problem. Therefore, companies whch face more investment opportunities need to keep a certain financial flexibility in a larger extent. At the same time, the need to strengthen management supervision of the state-owned listed companies and companies which face less investment opportunities and reduce the negative effects of financial flexibility. |
