The Research On The Correlation Between Financial Flexibility?Product Market Competition And Enterprise Value

The uncertain factors that enterprises will face in the future are characterized by complexity,dynamics and unpredictability.In addition,the market competition will become increasingly fierce.In order to get a better survival and development,enterprises have to realize the importance of financial flexibility.The global financial crisis in 2008 makes the practice and the theory begin to realize the great function of financial flexibility.So,the research of financial flexibility has begun to rise with time.However,there are few studies on how the financial flexibility affects the enterprise value,these studies focus more on the capital market.For example,the current scholars mainly explore the mechanism of financial flexibility to the value of enterprises from two aspects: financing constraints and investment behavior.Product market is the main battlefield for each enterprise,the performance in the product market directly determines the current market position and future development.From the perspective of product market competition,this paper discusses the mechanism of the effect of financial flexibility on enterprise value,which will further expand the financial flexibility theory from the capital market to the product market.Therefore,this paper puts forward the following questions.Question one: Is there a positive correlation between financial flexibility and enterprise value? Question two: Is there a positive correlation between financial flexibility and product market competition? Question three: will the financial flexibility affect the market competition,and then affect the value of the enterprise? These studies will be helpful to understand the internal mechanism of the influence of financial flexibility on enterprise value,which will provide theoretical guidance for the practice of financial flexibility.Firstly,on the basis of literature review and theoretical analysis,we analyze the relationship between financial flexibility,product market competition and enterprise value,then put forward three hypotheses.Secondly,based on the data of small and medium sized listed companies in 2012--2015 in China,this paper takes 2574 companies as effective samples.Then,we draw lessons and improve Chunai Ma's design methods and ideas to build a more comprehensive,dynamic and accurate financial flexibility index system.At the same time,combined with the mediating effect test,we construct three research models.Next,through descriptive statistics,correlation test,regression analysis,mediating effect analysis and robustness check,we conduct an empirical test and analysis on the three hypotheses.Finally,we summarize the conclusions,put forward some countermeasures and suggestions and point out the deficiency of research and future direction.Through the empirical research,we finally get the following conclusions: First,the financial flexibility is positively related to the value of the enterprise,that is,to reserve a certain financial flexibility is conducive to the promotion of enterprise value.Second,there is a positive correlation between financial flexibility and product market competition.In other words,the proper financial flexibility can help enterprises to obtain the competitive advantage of product market.Third,in the process of the impact of financial flexibility on enterprise value,there is a partial intermediary effect from product market competition.Therefore,to maintain a proper financial flexibility can help companies gain competitive advantage,thereby enhancing the value of the enterprise,which will explore the possible mechanism of the influence of financial flexibility on enterprise value.