Research On The Influence Of Debt Financing On Over-investment Of Private Listed Companies Under The Background Of Government Intervention

Investment is a necessary factor for the survival and growth of a company,and it is also the core issue in the financial decision making.When investment is effective and rational,it can increase the fortune and broaden the scope of companies.Moreover,it is also in favor of maximizing shareholder wealth,to attract more investors.Based on this,the company's investment behavior has been the central issue of researchers.At the same time,effective and rational investment decisions can not be separated from the correct and effective financing decisions.Financing decisions determine the amount of capital of companies,the cost of capital,which will affect the company's investment opportunities,investment project selection.On the contrary,the capital structure will change because of the amount of investment.It's necessary to research companies' financing behavior when we research its investment behavior.Our special two-tier system of property rights make a difference between the state-owned companies and private companies in financing cost.In the credit market leaded by banks which are controlled by the nation,state-owned companies can obtain a great deal of loans at low cost,while the financing conditions of private companies are relatively harsh,and the financing costs are high,especially for the small and medium-sized private companies.For the sake of obtaining the requisite funds for the survival and growth of private companies,they are obliged to pander to the political needs of the local government.The economic goals of the government force them to invest excessively.Therefore,it is necessary to discuss the relationship of debt financing and over-investment and the mechanism of government intervention on the relationship of debt financing and over-investment.With theoretical analysis and empirical study,the paper arrived at two conclusions:(1)With regard to private companies,loan availability is positively correlated with over-investment.(2)With regard to private companies,debt maturity level is positively correlated with over-investment.(3)Government intervention can improve the sensitivity between loan availability and over-investment of private companies.(4)Government intervention can improve the sensitivity between debt maturitylevel and over-investment of private companies.The innovations of this paper are:(1)Extend the research on the mechanism of debt financing to the over-investment behavior of private companies.Generally,foreign scholars believe that debt financing has the role of contingent governance.However,the debt financing is failure to play its due role in some cases.Then,debt financing can not restrain the over-investment,even causing it by bringing more cash flow.The empirical results of this paper furnish the basis for the above theories.(2)Government intervention in the allocation of financial resources is mainly reflected in the amount and the term of bank borrowings,so debt financing is refined as the loan availability and debt maturity level.This paper is to study the mechanism of government intervention on the relationship of loan availability and over-investment of private companies,and study the mechanism of government intervention on the relationship of debt maturity level and over-investment of private companies.The existing literature about government intervention and the efficiency of companies' investment is very rich,but the research on the relationship between government intervention,debt financing and companies' investment efficiency is rare.This paper selects the private companies as the sample data,focusing the mechanism of debt financing to investment efficiency under government intervention,enriching the research perspective of private companies' investment efficiency.