The Influence Of Companies Shareholding In Banks On Their Financing Constraints And Investment Efficiency

With the encouragement and support of national policies,more and more non-financial companies have achieved capital infiltration into the financial industry through shareholding in banks.In China,the bank's credit funds are the main channel for corporate financing.Therefore,whether this close bank-enterprise relationship established with banks through equity participation in banks can facilitate the financing of enterprises and alleviate the financing constraints they face.The investment and financing behaviors of enterprises are mutually influenced.Does the mitigation of financing constraints brought by shareholding banks help reduce the company's underinvestment? Will it increase the over-investment of? How is the impact on corporate investment efficiency? In the context of China's special system,what types of companies are more effective in the influence of shareholding banks on investment efficiency?Based on the above considerations,this paper attempts to incorporate the behavior of corporate shareholding in banks and the behavior of corporate investment and financing into a common analytical framework.First,this paper proposes hypotheses through sorting out existing literature and theoretical analysis.Then,we selecte 2,449 listed companies in China's A-share non-financial category from 2011-2016 as research objects.Finally,we establish models for empirical analysis.Firstly,this paper uses the cash-cash flow sensitivity model to explore the impact of corporate shareholdings in banks on their financing constraints.Then this paper uses the residual error measurement model proposed by Richcharson(2006)to study the influence of listed companies' shareholding in banks on their investment efficiency.Finally study the effect of shareholding in banks on investment efficiency in different types of enterprises according different property rights,different internal fund adequacy and different agency problem severity.The conclusions are as follows:(1)Compared with listed companies that do not sharehold in banks,listed companies that shareholding in banks have significantly lower levels of financing constraints,which means that shreholding in banks can significantly ease corporate financing constraints.(2)In the underinvestment sample,shareholding in banks can significantly reduce the company's underinvestment.In the sample of over-investment,shareholding in banks will significantly increase the over-investment.Therefore,shareholding in banks has the dual role of alleviating underinvestment and aggravating overinvestment,but overall,improves the investment efficiency of enterprises.(3)In terms of mitigating underinvestment,compared with SOEs or companies with ampleinternal funds,the role of shareholding in banks to alleviate underinvestment is stronger in privately-owned enterprises or companies with a relatively lack of internal funds.In the aspect of aggravating overinvestment,compared with companies with less serious agency problems,shareholding in banks have a stronger role on over-investment in companies where shareholders and managers have more serious agency problems.The innovation of this paper is: including shareholding in banks,financing constraints,and investment efficiency in the same analytical framework to study the effects of shareholding in banks on financing constraints and investment efficiency,and introduce regulatory variables to explore the different roles of shareholding in banks on investment efficiency.in different types of companies.