The Effect Of Financing Constraints On Company Investment

Financing constraints of enterprises will lead to changes in investment of enterprises,as we all know,whether to conduct external financing is a decision made by enterprises,so it is an endogenous choice of enterprises.This will make us unable to determine whether the external financing ability of the enterprise hinders the investment of the enterprise,or whether the investment demand to enhance the willingness of the enterprise to conduct external financing.In this paper,we need to identify the impact of financing constraints on enterprise investment behavior accurately.Today,with the rapid development of science and technology,small and medium enterprises are playing an increasingly important role,but they are facing many severe tests,among which the financing difficulty is an important problem restricting the development of small and medium enterprises.From the perspective of enterprises,compared with large state-owned enterprises,small and medium enterprises and non-state-owned enterprises have an information asymmetry problem.Because they have too little collateral and face high risks,financing problems will become more prominent.Due to policy intervention,there are significant differences between state-owned enterprises and non-state-owned enterprises in the allocation of the credit resources.In addition,under the impact of monetary policy,there are more obvious differences between state-owned enterprises and non-state-owned enterprises in financing constraints,which will make the investment capacity of non-state-owned enterprises continuously decline and far lower than that of state-owned enterprises.Due to the difference of property right between state-owned enterprises and non-state-owned enterprises,there are obvious differences in financing constraints,which will have a direct impact on the investment of enterprises.Therefore,from the perspective of enterprise investment,this paper takes the four trillion yuan rescue plan as the external impact variable.The “four-trillion-yuan plan” will lead to the excessive currency.Therefore,from 2009 to 2015,we began to implement the tight monetary policy,since 2009,bank lending became more cautious,which increased the financing cost of enterprises and caused the problem of financing constraint.According to the different degree of financing constraint,the whole sample is divided into experimental group and control group,that is,state-owned enterprise and non-state-owned enterprise.We use post to represent before and after the implementation of the “four-trillion-yuan plan”,the overall time span of this paper is from 2004 to 2016,covering the entire implementation process of the “four-trillionyuan plan”.The difference-in-differences model is constructed to study the impact of financing constraints on enterprise investment behavior.The study found that the presence of financing constraints problem as a whole will affect the investment behavior of the enterprise,and the effect of bank credit contraction of non-stateowned enterprises than state-owned enterprises,state-owned enterprises have excellent credit,so its external debt financing easier,thereby investment level is significantly higher than the non-state-owned enterprises.Then,this paper conducted a more indepth study,that is,from the perspective of internal governance level and the market environment of the enterprise to test the heterogeneity of the impact of financing constraints on enterprise investment behavior.The conclusion is that the significant influence of financing constraint on enterprise investment only exists in the enterprises with poor internal governance level and the enterprises with low level of regional market development.This shows that the financing constraint will affect the investment behavior of enterprises,but it has different influences on different internal governance levels and different market environments.In terms of robustness test,this paper adopts the tool variable method to test the robustness of the research results.At last,this paper systematically summarizes the basic conclusions of this paper,and puts forward relevant suggestions from three aspect: the enterprise,the market environment,and the interaction between the government and the market.According to the actual situation of enterprises,from two aspects of government and market at the same time,pay attention to those which really be willing and able to develop,making them protect the efficient investment.For different regions,the market environment should be improved according to the actual situation,so that resources in the capital market can be effectively allocated,while avoiding the waste of resources.