Study On The Investment Cash Flow Sensitivity Of Listed Companies In Northeast China From The Perspective Of Financing Constraints

Northeast area is China's heavy industry base.Since 1978,for kinds of reasons,the development of the old industrial base has been facing many problems.In October 2003,the Communist Party Central Committee issued Some Opinions on Rejuvenation Strategy of Old Industrial Bases Such as Northeast Area.Since the implementation of strategy of rejuvenating,the development of the northeast has obtained the stage results,and has solved the problem of survival in northeast china.But the development of Northeast China compared with the developed areas,there are a lot of distance.Therefore,the Communist Party Central Committee issued Some Opinions on Full Rejuvenation Strategy of Old Industrial Bases Such as Northeast Area.In this document,it is emphasized that the focus is to solve the transformation of enterprise in new round of work.Because of historical reasons such as the long-term unreasonable economic structure,the transformation of old industrial bases is developing rather hard.The financial support is facing many difficulties and problems: the first is the industry's financing difficulty;the second is lack of competitiveness in raising fund;the third is the lagging development after financing.Therefore,there is common financing constraint in the northeast area,the enterprise investment is mainly depending internal cash flow,leading to the sensitivity to cash flow.This article is to analyze the financing constraint and sensitivity of invest cash flow of listed companies in northeast area based on related theories.At first,analyze related theories,then select the data of companies listed on Shanghai Stock Exchange and Shenzhen Stock Exchange in northeast area as research sample,use analyze of regression to build financing constraint index,get the constraint degree of sample FC,and define the main indexes,analyze the sensitivity of invest cash flow by FPH88 model and Vogt1994 model,and analyze the relationship between financing constraint and sensitivity of invest cash flow,and verify the agent.The result of empirical analysis shows that there is positive correlation between investment expenditure and internal cash flow,the correlation degree is 0.59,the sensitivity between investment and internal cash flow is rather high.The relationship between the degree of financing constraint and the sensitivity of invest cash flow is studied by adding the product of the financing constraint index FC and the internal cash flow.The results show that the degree of financing constraint is positively related to the investment cash flow sensitivity.Adding variable Tobin Q,which is the mutual influence between cash flow and investment,and multiplies internal cash flow to verify the agent of investment cash flow sensitivity.The regression result shows free cash flow theory can explain the high sensitivity between investment and internal cash flow in northeast area.The result shows: at present,there is some degree of financing constraint for listed companies in the northeast of China.