Shareholding Of Financial Firms And Financial Constraints

In the past 40 years of reform and opening up,private enterprises have made outstanding contributions to the development of various fields of China's economy and society.But,The imperfect financial system in China and information asymmetry in the capital market have posed daunting challenges for the financing of private enterprises.This is an important factor that hinders the development of private enterprises.So they resort to equity investment to seek a place in the financial industry and obtain financing convenience.China has introduced relevant policies to guide and support private investment in the direction of healthy development.Under this background,firstly,through literature review and analysis of the factors that influence financing constraints and the relationship between non-financial enterprises with financial shares and financing constraints,the paper provides the theoretical basis for its hypothesis.Secondly,this paper takes 4334 data of A-share listed private enterprises from 2011 to 2014 as the research samples.By combining theoretical and empirical research method,this paper analyzes private listed enterprises holding equities of financial firms and their financing constraints,and explores the impact of interregional imbalanced financial development on the relationship between these enterprises and their constraints.The results of this paper show that compared with those holding no shares,private listed enterprises holding equities of financial firms have significantly mitigated their financing constraints,the "penetration of domestic industrial capital into financial sectors" approach of non-financial enterprises with financial shares can effectively remit the financial constraints of private enterprises by reducing information asymmetry between both parties of credit transactions,promoting the establishment of social network,and spreading positive information of enterprises'stable development.And in areas where financial development lags behind,the mitigation effect of holding equities of financial firms on the financing constraints of listed companies is found more prominent.Formal market mechanism cannot fully and efficiently play its role in the less-developed environment of finance due to incomplete financial system and asymmetric information of transaction parties.As a result,the informal mechanism where shareholding financial enterprises ease financial constraints can work better.In the end,the paper puts forward some suggestions for both private enterprises and government,summarizes the deficiencies of the research,and proposes follow-up research prospects based on these problems.