An Empirical Study On The Influence Of Internal Control Quality On Financing Constraints Under The Life Cycle Perspective

Access to capital is hampered,or even if you can get funding from outside investors,But it is also highly likely that the cost of using external funds is higher than the cost of using internal funds.This is known as a "financing constraint".According to our country's capital market situation can be seen: China's enterprises generally face serious financing constraints.This phenomenon exists even in state-owned enterprises,but the state-owned enterprises ' financing constraints are not as serious as non-state-owned enterprises.Other studies have shown that: in the region with high degree of marketization,the financing constraints faced by enterprises are lower.Many scholars have studied the problem of financing constraint from many angles of enterprises.So,how to solve the problem of financing constraints from the internal enterprise? Enterprises can alleviate the financing constraints they face by improving the quality of internal control.This article is based on 2012-2016 Shanghai and Shenzhen main board data of a-share listed companies,first of all,the listed companies in China face the situation of financing constraints are analyzed,the analysis results show that the financing constraint problem is prevalent in Chinese enterprises.Secondly,the influence of the internal control quality of the enterprise on the financing constraint is considered.It is found that high quality internal control can effectively alleviate the financing constraints of enterprises.The reason for this phenomenon is that when the quality of internal control is higher,it can provide more accurate accounting information to the outside world.This reduces the external financing costs caused by asymmetric information inside and outside the enterprise;At the same time,the higher the quality of internal control,can strengthen the supervision of the principal and major shareholders,at the same time,it is helpful for managers to make better production and operation decisions,which will reduce the cost of agency,and then alleviate the financing constraints faced by enterprises.Finally,according to the theory of enterprise life cycle,the paper divides the enterprise into the long-term,mature and recession,and studies the financing constraints faced by the enterprises at different stages.The results show that the financing constraints are the most serious in the growth period,but the function of financing constraint is relieved by improving the internal control quality of the enterprises.Although the enterprises in the mature stage are faced with the least financing constraints,it is not obvious that the financing constraints can be alleviated by improving the quality of internal control.Finally,according to the conclusions of the research,the author puts forward some relevant suggestions.The biggest difference between this research and previous research is: In the past,the influence of the quality of internal control on the financing constraints is mainly explained from the static aspect.However,in this paper,based on the cash flow,the sample enterprises are divided into three stages of long-term,maturity and recession,this paper studies the financing constraints of enterprises under different life cycle,and realizes the analysis from the dynamic angle.