Research On The Effect Of Financial Flexibility On Corporate Performance During The Financial Crisis

The globalization of economy makes the economic communication between countries go further;the competition of market becomes more and more intensified,and the uncertain factors in operating circumstance of enterprise continue to increase.At the same time,because of our incomplete capital market,information asymmetry and objective existence of transaction costs,it's necessary for an enterprise to keep moderate financial flexibility.Especially since the global financial crisis is aroused by subprime mortgage crisis,the research of financial flexibility receives the extensive concern from theory and practice fields.Given this the research has become a hot research project in financial management areas recently.This paper carries out the research in financial crisis,and hences a perspective of financial flexibility.Taking the A-share private real estate enterprises in our country as example,this paper researches the influence exerted by financial flexibility on corporate achievements during the financial crisis.Firstly,based on large data and literatures that have been collected,the influence exerted by financial flexibility on corporate achievements during the financial crisis has been analyzed theoretically,and the influence path has been derived.The corporate achievements are influenced by financial flexibility during the financial crisis,because the cash flow of the corporates with different financial flexibility will be different.The difference makes enterprises behave differently,along with their financing,investing and competiting among the product market and finally influences the corporate achievements.Secondly,this paper chooses 47 A-share private real estate enterprises are chosen as sample,and use the data of annual report during 2004-2007 before financial crisis.The relevant financial index is chosen from four dimensions of assets,debt,rights and cash flow,which build the financial flexibility index.The financial flexibility index of sample is calculated,sorted and grouped by using the method of factor analysis.Based on the integral inspection of sample enterprises' financial flexibility,this paper chooses Zhejiang Guangsha company as a single case to research,and compare with the Suning Huanqiu company as referring enterprise for comparative analysis.Through the research we found that the enterprises which do well in financial flexibility,based on the impact of global financial crisis,performs better than the enterprises which isn't good at financial flexibility.In view of the deficient universality of case study's theory,this paper adopts regression analysis to test the corporate,which is influenced by the financial flexibility under the impact of global financial crisis.The conclusion is well fit.So the research results of the paper have generality.At last,this paper sums up the research achievements as followed:some advice is given on how to keep financial flexibility and avoid risk.At the same time,several prospects about further research are given.This paper combines the research method from theory study and case study.Above all,the method does not only enrich theory study,but also provides an experimental approach for observing and analyzing financial flexibility,so this paper has a great theoretical and realistic significance.