The Research On The Contributing Factors For Financial Constraints Of Chinese Listed Companies

For a long time,financial difficulties have always plagued the smooth development of enterprises in various parts of the world.The financial constraints have the most serious negative impact on the development of the enterprise among them.Financial constraints refer to the gap between the capital companies get and the investment opportunities companies have.If enterprises faced with financial constraints to a large extent will inhibit the investment activities of enterprises,resulting in the bad performance of the overall economic development.In view of the negative impact of financial constraints on enterprises and countries,economists and governments began to pay attention to this phenomenon.A large number of related research emerged and the results were abundant.These achievements combine the relevant theoretical and empirical research in the field of corporate finance,setting up the theoretical system of financial constraints,revealing the important contents including the causes,mechanisms and economic consequences of financial constraints.And they not only deepen the academic understanding on financial constraints,but also provide useful advice for enterprises to ease the financial constraints.At present,the research system about the economic consequences of financial constraints is relatively mature.However,there are not only few studies on the causes of financial constraints,but also the results are controversial.Therefore,this article will study the causes of financial constraints of Chinese listed companiesthrough Stochastic Frontier Model,and provide empirical support for relevant theories.First of all,the article systematically sorts out the existing research results,clearly showing the specific conclusions about the causes of financial constraints.At the same time,the paper makes a brief summary of the main research methods.Secondly,in order to study the causes of financial constraints,this paper based on the existing research draws on the method proposed by Wang(2003),using the Stochastic Frontier Model to measure the financial constraints of enterprises and discussing the financial constraints of the Chinese listed companies by introducing heterogeneous variables into the model.The empirical results show that the listed companies in China are generally faced with much serious financial constraints,and the investment efficiency is mainly concentrated in 40%-60%.Moreover,there is a significant causal relationship between the financial constraints and information asymmetry of the listed companies in China.The degree of information asymmetry between investors and listed companies partly determines the degree of financial constraints the enterprises are faced with.And the higher degree of information asymmetry is,the higher financial constraints company will be faced with.Firm size,regional economic development and ownership all have a significant impact on financial constraints.The larger firm size is,the lower financial constraints firms will be faced with.The better the financial development is,the lower financial constraints firms will be faced with.And the state-owned firms are faced with less financial constraints than the private firms.In this regard,this article thinks that financial constraints of enterprises are caused by market factors and non-market factors.The adverse selection and moral hazard caused by information asymmetry make companies financing channels limited or financing costs too high,leading companies to face serious financial constraints.Instead of market factors,the credit discrimination of investors alsoaffects the financial constraints companies are faced with.Therefore,from the corporate point of view,enterprises should proactively disclose all the information that has an impact on investors' investment decisions to smooth the channel where investors can get the information to reduce market friction as far as possible.From the government's point of view,the relevant government departments should strictly enforce the relevant laws and regulations,and enhance the supervision to ensure information symmetry between market participants.The government should also support small and medium-sized and private-owned enterprises through industrial policies or fiscal policies,guiding financial resources into enterprises with potential and realizing the optimal allocation of resources to promote the healthy economic development and social progress.