Product Market Competition,Financial Elasticity And Inefficient Investment Behavior

Investment decision-making,as one of the important financial decisions of enterprises,occupies an important position in the financial management of enterprises.The correctness of investment decision-making has a great impact on the future capital inflow and the improvement of enterprise value.However,due to the existence of agency problem and information asymmetry,the inefficient investment behavior in China is compared.Therefore,how to improve the efficiency of investment and reduce the occurrence of inefficient investment behavior is an urgent problem to be solved.At the same time,with the deepening development of economic globalization,the market environment of enterprises is becoming more and more complex,and the risk of uncertainty increases.The concept of financial elasticity emerges as the times require.Many enterprises respond to emergencies by reserving a certain amount of financial elasticity to better grasp investment opportunities.But too high or too low financial flexibility will aggravate the problem of inefficient investment.The liquidation threat brought by product market competition can alleviate the agency problem caused by the separation of management right and ownership,and the degree of information asymmetry will be reduced,which will play a positive role in restraining inefficient investment.Based on the above analysis,this paper explores the relationship between financial flexibility and non-efficiency investment,introduces product market competition,and further studies the impact of product market competition on financial flexibility and non-efficiency investment relationship on the basis of distinguishing property rights.This paper first discusses the concept of product market competition,financial flexibility and non-efficiency investment,and collates relevant research literatures at home and abroad.At the same time,it makes a simple review and provides theoretical basis for subsequent empirical tests.Secondly,taking the 2013-2017 Shanghai-Shenzhen A-share listed companies as a research sample,study the relationship between financial flexibility and non-efficiency investment from the aspects of insufficient investment and over-investment,and verify the relationship between product market competition and the two.Regulating the role;at the same time distinguishing the nature of property rights,explore the different effectsof product market competition in state-owned and non-state-owned enterprises.The main conclusions of this paper are as follows:(1)The lower the level of financial resilience,the more serious the company's under-investment phenomenon,the competition in product market can reduce the degree of information asymmetry,thus alleviating the problem of insufficient investment caused by lower financial flexibility;High level of financial flexibility will lead to over-investment problems.Product market competition can alleviate the agency problem between the operator and the owner,thus inhibiting the excessive investment behavior caused by financial flexibility.(3)After distinguishing the nature of property rights,the empirical results show that the non-efficiency investment phenomenon of state-owned enterprises is more serious than that of private enterprises,but the effect of product market competition on the relationship between financial flexibility and non-efficiency investment is more obvious in private enterprises.Finally,based on the theoretical and empirical research conclusions,this paper proposes relevant countermeasures for non-efficiency investment issues.This includes the rational reserve of financial flexibility,the application of financial bombs to innovative investments,the cultivation of product competitiveness,and the improvement of internal information disclosure systems,and provides a new direction for further research.Through the research of this paper,I hope to provide some help for the improvement of China's investment status and the governance of non-efficiency investment issues.