Accounting Conservatism,Investment Efficiency And External Financing Ways

Accounting conservatism is a controversial accounting principle.It has been questioned by academia.In international accounting standards,it has experienced the process that is from acceptance to rejection to re-acceptance.As one of China's current accounting information quality requirements,accounting conservatism affects the enterprises' investment and financing behavior.The financing constraints caused by market frictions in real capital markets increase the complexity of the influence of accounting conservatism on investment and financing behavior.In the background of financing constraints,what effect does accounting conservatism have on investment and financing behavior? Whether accounting conservatism can solve the governance problem of investment efficiency? Whether it can solve the financing problems faced by enterprises when choosing external financing ways? And what kind of financing way will accounting conservatism promote the enterprises to choose to solve these problems? The research based on above problems will be of great theoretical significance and application value.Based on the background of financing constraints,this paper combines with investment and financing behavior,and puts accounting conservatism,investment efficiency and external financing ways into the same research framework.Based on the principal-agent theory,information asymmetry theory,investment theory,financing constraint theory,contract theory and signal transfer theory,this paper selects the data of Shanghai and Shenzhen A shares listed companies from 2007 to 2015 as samples,firstly,this paper empirically researches the impact of accounting conservatism on over-investment and under-investment.Secondly,considering the background of financing constraints,this paper empirically studies the impact of financing constraints on over-investment and under-investment,and the impact of combined action of accounting conservatism and financing constraints on over-investment and under-investment.Then,the research is further extended by combining with external financing ways,empirically studies the relationship among accounting conservatism,investment efficiency and external financing ways.Finally,the conclusions obtained from the empirical study are further discussed.The results show that:(1)Accounting conservatism can have positive economic consequences for the investment behavior.It has a significant inhibitory effect on both over-investment and under-investment and improves the investment efficiency.It solves the governance problem of investment efficiency from the perspective of information disclosure.(2)Chinese enterprises generally exist the problem of financing constraints.On the one hand,financing constraints can inhibit over-investment.Under the combined action of accounting conservatism and financing constraints,financing constraint strengthens the inhibitory effect of accounting conservatism on over-investment,they have synergistic effect,and accounting conservatism plays a major role.On the other hand,financing constraints can exacerbate under-investment.Under the combined action of accounting conservatism and financing constraints,financing constraint strengthens the inhibitory effect of accounting conservatism on under-investment,and accounting conservatism shows the effect of governance.(3)Accounting conservatism can have positive economic consequences for the financing behavior.It can promote under-investment enterprises to choose debt financing rather than equity financing.It is helpful to alleviate the conflict between debt financing and equity financing when enterprises raise funds.Further research shows that the relationship among accounting conservatism,investment efficiency and debt financing is not affected by debt maturity,but it is affected by the nature of property rights,compared with non-state-owned enterprises,the promoting effect of accounting conservatism on the choice of debt financing way is more significant in the state-owned enterprises with under-investment.