A Study On The Effect Of Corporate Financial Constraints Of Idiosyncratic Risk And The Quality Of Accounting Information

In the perfect and complete capital market, external funds are complete substitute for internal funds, and there is no corporate financial constraints. Due to the existence of objective factors of the capital market imperfection, the scarcity of financial resources and the problem of information asymmetry and principal-agency makes it difficult to allocate limited financial resources effectively. It is different between the external and internal financing cost, and the external financing cost more than the internal. Actually, financial constraints significantly influences corporate investment behavior and the value of the corporation. In the real world, the enterprise idiosyncratic risk have a significant impact on the financial cost and the degree of financial constraints. As the most important way to understand the enterprise'operate results, financial position and cash flows, the accounting information is paid much attention by external investors, and who expect to perceive the enterprise idiosyncratic risk through the accounting information. The quality of accounting information also has a direct impact on the efficiency of financial market resource allocation.This paper is based on the theory of principal-agency, information asymmetry, information signal and credit rationing. Study and analysis the influence mechanism of the enterprise idiosyncratic risk and accounting information quality on the firm financial constraints, and the difference influence of the accounting information quality on the financial constraints with different firm size and ownership.Empirical results show that the enterprise idiosyncratic risk will significantly affect the corporate financial constraints, specifically, the enterprise idiosyncratic risk is positively with corporate financial constraints, and high quality of accounting information would help to reduce information asymmetry and agent conflict caused by the enterprise'environment uncertainty. Furthermore, the accounting information' capital allocation function is more obvious for private firms and small firms.