Financing Constraints, Executive Background And Inefficient Investment

The results of macro statistics and empirical research indicate that there are insufficient investment and excessive investment both in the vertical dimension and horizontal dimension of Shanghai and Shenzhen A-share non-financial enterprises in China.Financing constraints reflect the degree of access to funding and have an important impact on the investment efficiency of enterprises,which requires us to study the relationship between financing constraints and non-efficient investment of companies,then adjust the financing behavior in time according to the direction of enterprises' non-efficient investment.According to the high-level ladder theory,in recent years,in order to improve the current situation of financing and improve the efficiency of investment,many enterprises in China tend to establish the political background,Academic background and financial background of senior executives.But do the executive background characteristics of the enterprise have an impact on the financing,whether it can alleviate the inefficient investment behavior of the enterprise?In a summary,it is of great practical significance to study the connection between corporate financing constraints and inefficient investments,and to study the relationship between executive background and financing constraints.Through the combination of literature analysis,normative analysis,empirical analysis,this paper studies the influence of financing constraints on under-investment and Over-investment,and subdivides the nature of state-owned and private property rights.Then,this paper distinguishes the political background,the financial background,the Academic background variables,observes how the executive background variables influence the enterprise financing,investment and their relationships.After clarifying the purpose and significance of the research,this paper firstly analyzes the logical relationship and research status of the three variables by collecting and sorting out the literature,then clarifies the theoretical basis.On the basis of the existing theory and literature analysis,the hypothesis is deduced,and proposed.Then,through descriptive statistics,correlation analysis,regression analysis,the hypothesis is tested one by one.Finally,according to the results of empirical analysis combined with the existing literature,this paper summarizes the content of the article,and gives for enterprises to ease the financing dilemma,to alleviate inefficient investment,reasonable use of executive background and give policy recommendations;last but not least,this paper summaries the deficiency of the present research and the broad space of the future research.The conclusions of this paper are as follows: 1.The enterprises of Shanghai and Shenzhen A shares in non-financial industry have the disadvantage of inefficient investment,and the main form is under-investment.It is relieving that the gap between the actual investment and the expected investment level is not very wide,and there is almost no phenomenon of abnormal high investment and unusually low investment.The financial performance of enterprises has a significant impact on the two forms of inefficient investment.In the Over-investment group,the asset-liability ratio,enterprise size and over-investment are significantly negative correlation,in the Under-investment group,the operating Cash flow,the asset-liability ratio,the enterprise size and the under-investment are significantly positive linked.3.The extent of financing constraints and the degree of under-investment is of significantly positive correlation,and the financing constraints of private enterprises are more likely to cause under-investment.4.There is a significant negative correlation between the degree of financing constraint and the degree of excessive investment,and the state-owned enterprises can explain the more negative correlation.5.The political background of the enterprise has a double-edged sword effect: the political background alleviates the financing constraint and restrains the under-investment brought by the financing constraint,but the potential risk of excessive investment increases.6.Hiring executives with experience in financing industry does not significantly alleviate under-investment or lead to over-investment.The use of senior executives with Academic background in enterprises has a double-edged sword effect.Although it intensifies the response of financing constraints to over-investment,it enhances the Over-sensitivity of enterprise financing constraints,which makes the investment excessive decline when enterprises are faced with financing constraints.The conclusion of this paper provides policy advice for financial institutions and enterprises to alleviate financing constraints,enterprises with different property rights and investment status to improve investment efficiency.