Research On The Effect Of Debt Maturity Structure?Accounting Conservatism On Inefficient Investment

Western theory holds that debt has a governance effect on inefficient investment,but research based on debt maturity structure finds that the results would be different depending on the debt maturity.And there is even a contradictory view about that in the academic world.Inefficient investment is common in China's capital market,and since market is imperfect,market friction has affected agency costs and made the relationship between debt financing and investment more complicated.At the same time,as one of China's current accounting information quality requirements,accounting conservatism would also affect investment efficiency and has been controversial.So,how does the debt maturity structure affect inefficient investment in terms of China's current market?Can accounting conservatism be used to solve inefficient investment problems?Can accounting conservatism alleviate the adverse effects of debt maturity structure on corporate investment behavior and exert governance effects?The research on the above problems has certain theoretical significance and application value.This paper incorporates debt maturity structure,accounting conservatism and inefficient investment into the same research framework.Based on relevant theories,this paper conducts empirical research on China's 2013-2017 Shanghai and Shenzhen A-share listed companies,and dividing the two sub-samples of over-investment and under-investment for further discussion.Firstly,the impact of the debt maturity structure with high long-term debt ratio on inefficient investment is tested by OLS regression method.Then,the impact of accounting conservatism on the two kinds of inefficient investment behaviors is tested.Finally,the combined influence of the two on inefficient investments is verified,trying to explore and confirm the positive regulation of accounting conservatism in this process.Finally,the paper analyzes empirical results and summarizes the research conclusions,then puts forward relevant suggestions based on the market background of China.The study found that:(1)For listed companies in China,the higher the long-term debt ratio,the more likely the debt maturity structure will lead to inefficient investment,mainly reflected in over-investment;(2)The accounting conservatism suppressed inefficient investment from the perspectives of alleviating information asymmetry and agency conflict,which can reduce the excessive investment of listed companies and alleviate the lack of investment;(3)Accounting conservatism plays a positive role in regulating the impact of debt maturity structure on inefficient investments.Specially,when the ratio of long-term debt in listed companies is high and over-investment is aggravated,the improvement of accounting conservatism would weaken the negative impact.Therefore,in order to reduce irrational investment,it is suggested that listed companies need to arrange the debt maturity structure reasonably especially to guard against excessive long-term debt ratios leading to excessive investment,and strengthen the use of accounting conservatism at the same time;creditors should pay more attention to the accounting conservatism of enterprises when providing long-term debt in the meanwhile,so as to governance inefficient investment more comprehensively.