Study On The Relationship Among Financial Frictions,IFDI And Corporate Financing Constrains

Over the past 40 years since China's reform and opening up,the world has witnessed tremendous changes.China has become one of the fastest growing economies.But generally speaking,economic growth is positively related to financial development level,but the relationship between financial development level and economic development speed in China has become an exception.So why does China achieve rapid economic development when the level of financial development lags behind? Why are private enterprises facing severe financing constraints achieving rapid development? By skipping the level of financial development and turning to the perspective of informal finance,it can be found that China has always adhered to the policy of attracting investment and peaceful development,constantly integrated into the world economic system,shared opportunities and development with other countries,and attracted many countries from the world to invest in China.The total amount of foreign direct investment absorbed by China has increased year by year.Sufficient funds in the market have slowed down the financing constraints of enterprises,the number of private enterprises has increased steadily,and the quality of enterprises has made considerable progress,making a significant contribution to the increase of tax revenue and the creation of employment in China.Therefore,based on the relevant research of many scholars,considering the financial friction and IFDI factors,using the data in the database of China's industrial enterprises from 2001 to 2013,reference to Bon and Meghir(1994)to expand on the basis of investment cash flow sensitivity model,and under the actual control of the three factors of the enterprise's investment opportunity,agency cost and the enterprise's establishment period,in accordance with the logic of layer by layer promotion,This paper studies whether the development of enterprises is affected by financing constraints,whether IFDI can reduce the degree of financing constraints,and whether IFDI and financial friction can alleviate the level of financing constraints.The main conclusions of this paper are as follows:Chinese enterprises do have the problem of financing constraints,and they rely on internal cash flow when they invest.At the same time,the inflow of FDI,to a certain extent,alleviates the financing constraints faced by Chinese enterprises.However,generally speaking,enterprise investment is greatly affected by its own cash flow.From the results of co integration test,there is a long-term equilibrium relationship among IFDI,financial friction and corporate financing constraints in China.Under the background of financial friction,IFDI not only affects the investment behavior of enterprises,but also affects the external financing of enterprises.On this basis,this paper puts forward feasible suggestions,hoping to provide theoretical reference for solving the problem of corporate financing constraints in the context of IFDI.