Property Rights,Financing Constaints And Financial Flexibility—Evidence From Chinese Quoted Companies

Financial flexibility refers that there is uncertainty in the enterprise capital operation and financial activities.The financial flexibility management is that enterprises implement dynamic financial management,according to the change and uncertainty of the environment.Enterprise financial flexible management is a key factor to improve the enterprise performance,because low flexibility reduces the ability of the enterprises to deal with the uncertainty,which lead to operational or financial risk,and high flexibility reducing the risk at the same time also increases the agency costs and the opportunity costs.Focusing on the financial flexibility level of enterprises,we find that there are obvious differences in the financial flexibility level of enterprises with different property rights,through the study of China A share market in the 1999-2013.Due to the imperfection of capital market,enterprises often have strong incentive to hold too much cash and other liquid assets to ease financing constraints.And the existence of private enterprise financing constraints degree higher than the state-owned enterprises has been recognized by scholars at home and abroad,so financing constraints is likely to cause different enterprise financial flexibility between these two types of property.The interaction of property rights,financing constraints and financial flexibility is the key point of this paper.In addition,this paper also makes a research on the reasons for different financial flexibility between the central state-owned enterprises and local state-owned enterprises,financial constraints or soft constraints of the budget.This paper put forward the research assumption,finally studied the relationship between property right and financial flexibility and the reason of the different financial flexibility of different property rights.The results are as follows: First,the financial flexibility of private enterprises is higher than the state-owned enterprises,also the financial flexibility of central state-owned enterprises is higher than the local state-owned enterprises.Second,the degree of financing constraints of private enterprises is higher than that of state-owned enterprises,and the degree of financing constraints of the central state-owned enterprises is lower than the local state-owned enterprises.At the same time,it also shows that the reason why the private enterprise financial flexibility is higher than the state-owned enterprise lies in the financing constraints,but it is not the reason of financing constraints that the central state-owned enterprise financial flexibility is higher than the local state-owned enterprises.Third,the soft budget constraint of the central state-owned enterprises is higher than the local state-owned enterprises,which is the reason why the central state-owned enterprises financial flexibility is higher than the local state-owned enterprises.This paper reveals that the enterprises of our country are facing serious financial constraints,existing unfair phenomena of financing between state-owned enterprises and private enterprises,and soft budget constraint problems in state-owned enterprises.This study is meaningful for abundant financing constraints and financial flexibility related fields,also proposes policy recommendations to ease the financing constraints and improve the financial flexible management level.