Research On The Correlation Between Financial Flexibility And Corporate Value Of Listed Companies

With the rapid development of the world economy,China is in the key period of economic transition.The rapid development of the economic situation makes the business environment of the company face more and more uncertainty and brings more challenges to the financial management of the company.After the outbreak of the global financial crisis in2008,many companies ultimately failed to survive in crisis because of the fracture of capital chain.Financial flexibility has gradually attracted more and more attention of management and scholars.To cope with the increasingly severe economic situation,companies need to change the management concept,realize the change of thinking from "rigidity" to "flexibility",improve its ability to resist risk and grasp the unexpected investment opportunities.Reserving certain financial flexibility has a positive role to mitigate adverse impact and enhance the value of the company.However,the research of financial flexibility start lately.The research is not in-depth,there is still greater space for us to further explore.This thesis uses a total of 7517 financial data from China's listed companies in Shanghai and Shenzhen Stock Exchange during the period of 2011-2015 as the research samples,tests the relationship between financial flexibility and corporate value,and the impact of environmental uncertainty and property rights factors on the relationship between financial flexibility and corporate value.Firstly,this thesis systematically analyze the literature on financial flexibility and its economic consequences,and expounds the Principal-agent Theory and Information Asymmetry Theory.Secondly,puts forward the research hypothesis based on the comprehensive analysis of the function mechanism of financial flexibility to corporate value.Finally,does the empirical study of the relationship between financial flexibility and corporate value by the method of multiple regression.The empirical results show that at present,the financial flexibility of the listed companies is generally low,and compared with non-state-owned listed companies,the financial flexibility of state-owned companies are lower.Reserving financial flexibility enhances the value of the company,but with the increasing of financial flexibility,the effect caused by the selfish behavior of managers will weaken the promotion of financial flexibility to the corporate value to a certain extent,an inverted U-shaped relationship between financial flexibility and corporate value is found.When theenvironmental uncertainty of the company is greater,the financial flexibility has obvious effect on the corporate value.In addition,financial flexibility is more significant to the value of the non-state-owned listed companies than state-owned listed companies.With the increasing of financial flexibility,state-owned listed companies have more significant agency effect than non-state-owned companies.Based on the research conclusions,this thesis suggests that Chinese companies should reserve appropriate financial flexibility,and strengthen the corporate governance to ensure that financial flexibility have a positive effect on corporate value effectively.Also,companies should pay attention to their own competition ability to deal with the increasing uncertainty properly.At the same time,the government and relevant departments should accelerate the development of capital markets,broaden the financing channels for companies and reduce the financing costs of companies fundamentally.