Research On Inhibiting Enterprise Inefficient Investment From The Perspective Of Financial Flexibility

In recent years,our country's economy develops rapidly,the investment behavior in the enterprise financial behaviors highlighted the core position,the investment efficiency will not only affect the enterprise's continuous operation and the development of the enterprise,but also is related to the development trend of the whole national economy.However,the development of capital market is not perfect and the problem of inefficient investment needs to be solved.Many scholars have found that appropriate financial flexible reserve can effectively control the low investment efficiency.Financial flexibility has the attributes of "prevention" and"utilization",Maintaining appropriate financial flexibility means that the enterprise has appropriate debt capacity and cash holdings.Appropriate financial flexibility reserve can help enterprises to cope with the impact of environmental uncertainty,grasp good investment opportunities,and improve the efficiency of resource allocation.Thus,financial flexibility is an important factor to study the investment behavior of enterprises.Based on the causes of non-efficiency investment,this paper discusses the methods of restraining non efficiency investment from the perspective of financial flexibility.The imperfection of the capital market leads to serious financing constraints between shareholders,investors and Banks.The existence of Financial flexibility will alleviate the current situation of insufficient investment.The separation of the two rights leads to agency conflicts between managers,shareholders and creditors.Reserving financial flexibility means that enterprises have sufficient funds,which widens managers' excessive investment.It can be seen that there is a close relationship between financial flexibility,financing constraints and insufficient investment,as well as between financial flexibility,agency cost and excessive investment.By analyzing the internal link,it is helpful to provide policy suggestions for reducing inefficient investment behavior.Therefore,based on the researches and theories of the impact of financial flexibility on inefficient investment,under the framework established by previous scholars,this paper introduces two intermediary variables,financing constraint and agency cost to explore the impact path of financial flexibility on inefficient investment and analyze the effect of intermediary variables.Most previous research results have only concluded the ultimate economic consequences of financial flexibility on enterprise investment.However,there are few researches on whether and how much role the intermediary plays in the process of influence.This paper empirically quantifies the intermediary effect of financial flexibility on financing constraints and agency costs,deeply analyzes how the financial flexibility affects inefficient investment,and reveals that financial flexibility can alleviate financing constraints and then alleviate underinvestment,and can also aggravate agency costs and then trigger excessive investment.In addition,good corporate governance has a perfect supervision system and incentive mechanism,which can restrain agency conflicts and play a certain regulating role between financial flexibility and excessive investment,it has certain reference significance for solving inefficient investment.This article is divided into six parts.The first part mainly introduces the research background and significance,contents and methods of research and filling,and puts forward the innovation and shortcomings.In the second part,the domestic and foreign literatures and theories on financial flexibility and non-efficiency investment are summarized and reviewed,which lays a theoretical foundation for the following empirical analysis.The third part elaborates the theoretical analysis and hypothesis of restraining enterprise's non-efficiency investment from the perspective of financial flexibility,and puts forward three hypotheses:(1)financing constraint plays a regulating role in the process that financial flexibility affects underinvestment.Finan-cial flexibility can alleviate underinvestment by acting on financing constraint;(2)ag-ency cost plays a regulating role in the process in which financial flexibility affects excessive investment.Financial flexibility will aggravate overinvestment by acting on agency cost;(3)the improvement of corporate governance can weaken the aggravating effect of financial flexibility on excessive investment.The fourth part constructs the definition of non-efficiency investment variable,financial flexibility variable and other variables and constructs the models according to the hypothesis.In the fifth part,descriptive statistical analysis is conducted on the samples of manufacturing companies in Shanghai and shenzhen from 2013 to 2017.Multiple regression analysis is conducted through Richardson's residual model and the model constructed to empirically test the above assumptions and further test the robustness of the model through substituting the variables.The sixth part is the conclusion and policy Suggestions.(1)establishing the concept of moderate financial flexibility reserve and improving the flexibility of investment decision;(2)establishing a reasonable early-warning system of "financial flexibility investment";(3)establishing a sound governance structure to prevent the abuse of financial flexibility;(4)strength-ening information disclosure,building a multi-level credit market and capital market.The innovation mainly includes two aspects:(1)I improve the index selection of efficiency of investment model,this article selects the average revenue growth rate of the last three years to measure the growth opportunities,rather than the Tobin'q value.Because there are many non-tradable shares in China's capital market,it is difficult to define their market value,and there may be deviation in calculation.This approach enhances the accuracy of empirical research data.(2)previous studies only analyzed the total effect of financial flexibility on inefficient investment.but this paper focused on the internal mechanism and quantified the role of intermediary variables of financing constraint agency cost.