| In the study of the company’s investment behavior,MM theory assumes that the market is perfect and there is no obstacle to access to funds.However,the existence of asymmetric information in the reality makes company’s internal financing costs different from external financing costs.The external financing costs is higher than the internal financing costs,and thus,companies often face financing constraints.Financing constraint is that the enterprises can’t get enough funds due to the capital market imperfection.Therefore,they have to give up some projects whose net present value is positive.Thus,the investment level is lower than the optimal investment level,resulting in the loss of investment efficiency.An important feature of developing countries is that their financial development is lagging behind.The world bank conducted a survey from November 2011 to March 2013 on the owners and senior managers of 2700 Chinese companies,22.4%of the companies took Access to Finance as an obstacle to the business development.Financing problem is the most concerned problem of all trade barriers.In the survey,only 14.7%firms had used banks to finance investments,and only 4.5%of all companies’ fixed assets were financed by banks.and the two indicators in the whole world were 25.3%and 14.3%respectively.In addition,in October 2016,the world bank issued the Doing Business in 2017:Equal Opportunity for All.In 190 respondents,China’s financing environment ranked sixty-second.In a word,financing problem is still the main obstacle restricting the development of the companies.Most of the existing researches use the sensitivity of investment cash flow to determine whether the enterprises are facing financing constraints.However,it is not clear whether the investment cash flow sensitivity is caused by financing constraints,or by the agency problem.Secondly,in order to use of cash flow indicators to prove the existence of financial constraints of enterprises,you need to group samples in advance.The use of single index grouping is one-sided and the use of comprehensive indicators for evaluation is often arbitrary.In this paper,the author uses a new econometrics method:the stochastic frontier model.Different from the previous post analysis method,the model is based on the investment decision of the enterprise and take the gap between actual investment level under financing constraints and the optimal investment level as a measure of the degree of financing constraints the enterprise faces.In this model,the structural relationship between the variables and the mechanism is relatively obvious.This method can be used to quantify the financing constraints,and it is not necessary to group the samples in advance.Besides,we can measure the effect of the corporate characteristics on the financing constraints.The choice of estimation method on stochastic frontier model depends on the assumption of the distribution of the non efficient items.In consideration of the robustness,this paper assumes that financing constraints obeys normal distribution and truncated normal distribution,and the random distribution of the mean or variance is expressed as a function of business factors,which take full account of the heterogeneity of enterprises.Based on the total of 6543 sets of observations from 727 companies from 2007 to 2015,this paper find that the average investment rate of listed companies was 0.6 under the circumstance of financial constraints,and most of the enterprise investment efficiency distribute between 0.6 to 0.8.That is to say that most of the enterprises experience an investment efficiency loss of 20%to 40%because of financing constraints.In the stochastic frontier model,cash flow plays a significant role in reducing corporate financing constraints,which is consistent with previous studies.At the same time,the scale of the enterprise is also conducive to ease financing constraints.This could be explained by the facts that enterprises of large scale operate with frequent external communication which helps to lower the degree of information asymmetry and that they have more collateral to obtain bank credit.The study also finds that the debt financing is more effective than the equity financing to ease corporate financing constraints.The reason may be that debt financing is relatively easy to achieve currently,and equity financing is not standardized.Grouped by the characteristics of enterprises,the private enterprises,the central and western enterprises and strategic emerging industries are facing more serious financial constraints.Finally,the paper puts forward some suggestions to alleviate the degree of financing constraints. |
