The Effect Of Assets Specificity On Listed Companies’ Financing Ability

Until the end of 2014,there were 2652 listed companies.Nowadays,listed companies have become the backbone of the national economy.Survival and development of Listed companies is significant for the national economy.When the development of companies come to a certain stage,it tend to expand the scale or establish new projects,which requires financial supporting.Whether Companies can raise enough money to support it’s development depends on the listed company’s financing capacity.In the market economy,financing capacity can be described as one of the most important factors,which affects the competitive strength of listed companies.This article selects factors such as profitability,operating capacity,growth capacity and other indicators to gain indexes of debt financing capacity,equity financing capacity and financing capacity,in the method of main ingredient analysis.This article uses the proportion of intangible assets and R&D expenditures to measure asset specificity1 and the proportion of fixed assets to measure asset specificity2.Based on reviewing previous literature and in the guidance of MM theory,trade-off theory,agency theory,transaction cost theory and pecking order theory,this article proposes hypothesizes,then it makes use of the sample from the Shanghai Stock Exchange and the Shenzhen Stock Exchange between 2010—2014 to do empirical research in method of multiple linear regression analysis.As the conclusion shows,assets specificity presents strong negative correlation with debt financing capacity,and strong positive effect on equity financing capacity;assets specificity presents strong negative correlation with financing capacity.To resolve financing difficulties,this article proposes the following recommendations:companies have large high specific assets are supposed to finance with equity,which makes it easier for them to raise money;to enhance its debt financing capability or overall financial capability,a company maybe should have as less high specific assets as possible;while,there still exist companies which have to build high specific assets and meanwhile have low financing capacity,and this paper suggests that government departments set up dedicated funds to address financing problems of these companies,in consideration of the development of local economic.