The Research On The Correlation Between Financial Flexibility And Corporation Performance Under Different Ownership Property Rights

As the global finance market growing,the world economic developing,and the economic system keeping reformed,enterprises are facing fiercer competed situation and more fluctuant finance environment.Meanwhile,China's socialist market economy is the world's second largest economy by nominal GDP,which is right in the fast development stage,the Chinese enterprises are experiencing a period of strategic opportunities and encountering more invest changes.Nevertheless,these opportunities are always accompanying with the risks.For the enterprises running in this kind of market climates,to keep and rise its financial flexibility,to some extent,is quite essential,which could facilitate firms' growth by providing more buffer when the firms were in the troubles.Firms could apply its financial flexibility to take a necessary emergency response.Therefore we deem that keeping financial flexibility is risk averse.Considering the sustainability of enterprise development,business capital operating is served as a critical role,hence the financial flexibility as a creative theory of finance management is getting more attentions by scholars.This thesis has theoretical significances and practical significances.Firstly,the thesis enriches the study of finance flexibility.Based on current studies and related essays,the thesis raises a hypothesis that the correlation between finance flexibility and corporation performance was an inverted U-Shape curve,and attest its hypothesis by empirical analysis the data from Stock Market Listed Companies in 2012-2016.Secondly,the thesis expands the study range of finance flexibility,conforming to our national conditions.The thesis takes account of the characters of our socialist economic system,studying the impact difference between state-owned corporations and non-state-owned corporations,and the thesis takes account of all corporation performance relevant factors,putting factors of equity structure,industry variables and growth into the study model,therefore,the conclusions of the thesis have guiding significance.On the other hand,Thirdly,by studying the correlation between finance flexibility and corporation performance,the thesis is providing theoretical directions and scientific advices to the entrepreneurs for further optimizing their strategies and capital structures.The thesis combines normative research and empirical research.Based on current studies and related essays,the thesis raises a hypothesis that the correlation between finance flexibility and corporation performance was an inverted U-Shape curve,and attest its hypothesis by empirical analyzing the data from Stock Market Listed Companies in 2012-2016,using descriptive statistical analysis,correlation analysis and multiple regression analysis methods.For the reasons above,this thesis based on former researches is mainly focus on the correlation between financial flexibility and corporation performance,explaining how the financial flexibility would contribute for corporation performance.The thesis concludes that financial flexibility universally served as a positive role on corporation performance,and the correlation between finance flexibility and corporation performance is an inverted U-Shape curve,which means that higher finance flexibility is not always the better.There is a breakeven point on their correlation curve.The financial flexibility would have negative impacts on the corporation performance when it overpasses this breakeven point.Furthermore,the thesis finds that under different ownership property right,the breakeven point on the curve occurs earlier or later,implicating that the non-state-owned firms needs more financial flexibility to promote their performances.The innovation of this paper mainly lies in that the article innovatively incorporates the nature of property rights into the research,divides the listed companies into state-owned listed companies and non-state listed companies,and studies the differences in the effects of financial flexibility on the two companies with different property rights and proposes them.Guiding advice.In addition,when selecting performance evaluation indicators,the text abandons financial indicators such as ROA and ROE that are commonly used in previous studies.Instead,it uses economic value added value(EVA)that can reflect the actual residual income of enterprises to measure corporate performance,and can more accurately reflect the level of corporate performance.This will provide more objective support for this study.