Research On The Impact Of Financing Constraints And Political Relevance On Enterprise Value

Enterprise financing has always been one of the most important problems in the development of Chinese enterprises.However,the development of enterprises is an important driving force for China's rapid economic development,so it is particularly important to solve the problem of financing difficulty and high cost.Compared with the state-owned enterprises,the private enterprises are hardly favored by the capital market,and the state-owned enterprises are handy to finance,but the private enterprises are difficult to finance.At the seminar on private enterprises marking the 40th anniversary of reform and opening up,General Secretary Xi Jinping pointed out that private enterprises contributed more than 50 percent of tax revenue and more than 60 percent of the gross domestic product.Therefore,we must constantly create a better development environment for the private economy,help the private economy solve the difficulties in its development,and keep lowering the financing cost while solving the problem of enterprises not being able to raise capital "Three Arrows" of bond,credit and equity financing.The development of enterprises affects the development of the national economy and is also an important force in achieving the"two centenary goals" and the great rejuvenation dream of Chinese.Therefore,the community of the financing constraints on the degree of concern has been maintained at a high level.Through the previous literature research shows that private enterprises with political connections can better access to financing,which is conducive to ease the financing constraints of enterprises.However,there are a lot of researches on the influence of financing constraints on firm value,but it is not common to study the moderating effect of political association on Financing Constraints and firm value.Therefore,this paper constructs an empirical research model with financing constraints as the core.Firstly,the former scholars'SA index is selected as an index to measure the level of financing constraints Then factor analysis method is used to extract the principal component and Excel to establish a comprehensive index of financing constraints,through which the level of financing constraints can be measured.The purpose of this paper is to explore the relationship between financing constraints and firm value,the influence of political relevance on firm value,and whether political relevance can alleviate the relationship between financing constraints and firm value.Specifically,through the selection of a-share listed companies related data,and further regression analysis found that:the stronger the level of financing constraints,the higher the value of enterprises,the smaller the financing constraints;Political Relevance has a positive correlation with enterprise value,and the more political relevance,the 'higher the enterprise value.Political Relevance has a positive moderating effect on the relationship between enterprise value and financing constraints Political Association can effectively mitigate the adverse impact of corporate financing constraints on corporate value.Based on this conclusion and drawing on previous research experience,this paper proposes that enterprises should strengthen corporate governance,constantly improve the agency problem,seize investment opportunities,find multiple financing channels,establish credit management mechanism,staff incentive mechanism,and give full play to the role of government functions.It is hoped that it can be used for reference to ease the financing constraints and the future development of enterprises.