A Study On The Impact Of Financial Flexibility On Non-efficient Investment In Manufacturing Enterprises

In the whole life cycle of an enterprise,investment activities play a great role in the survival and development of the enterprise.Good investment efficiency can help the enterprise to more significantly enhance its value.However,under the condition that the real capital market is generally imperfect,the rapid economic development has led to more serious principal agent problems and information asymmetry problems,bringing more serious inefficient investment problems to enterprises.In view of the increasingly complex environment of enterprises,more and more scholars began to find ways to solve the problem of inefficient invest ment,Through research,scholars found that financial flexibility is a kind of ability to help enterprises seize investment opportunities and deal with future uncertainties.As the environment in which enterprises are located becomes more complex,more and more scholars begin to pay attention to the impact of financial flexi bility on investment issues.For enterprises in a highly uncertain environment,fin ancial flexibility can help enterprises with short time and low cost to obtain funds,and achieve the goal of grasping investment opportunities and coping with emergencies.Therefore,the analysis of financial flexibility on the mechanism of inefficient investment has a certain research value.At the same time,due to the separation of ownership and management rights of modern enterprises,also bring about the role differentiation of shareholders and managers,and management power as a kind of management's ability to execute their own will,with the increase of management power,the management's self-interest trend will further cause the deterioration of inefficient investment.It can be seen that when the financial flexibility reserve plays a role in the inefficient investment,if the management power increases,it is likely to have an impact on the relationship between financial flexibility and inefficient investment,and regulate the mechanism between them.In order to solve the problem of inefficient investment in modern enterprises,this paper studies its relationship with inefficient investment from the point of view of financial flexibility,and on this basis,adds management power as a regulating variable to explore how the relationship will change with the increase of management power,so as to help enterprises cultivate the prevention awareness of reserve financial flexibility and establish a sound moderate degree In order to effectively help enterprises to prevent the negative impact on inefficient invest ment when the management has too much power.Based on the above analysis,this paper studies whether financial flexibility can effectively improve the non-investment efficiency of enterprises.On this basis,it includes the power of management and discusses the impact of management power on the relationship between financial flexibility and no-efficiency investment.First of all,this paper summarizes the literature on the relationship between management power,financial flexibility and inefficient in-vestment,defines the concept and analyzes the relevant theory,which provides a theoretical basis for empirical analysis.Secondly,this paper selects the data of Listed Companies in Shanghai and Shenzhen A-share manufacturing industry from 2013 to 2018 as samples,measures enterprise investment with reference to Richardson investment residual model,classifies enterprise inefficient investment into under investment and over investment and quantifies them,and then uses relevant models to carry out empirical verification,discusses the impact of financial flexibility on two kinds of inefficient investment problems,and verifies the rights of management In order to provide theoretical and data support for improving the investment efficiency of China's listed companies,and put forward constructive suggestions.The main conclusions of this paper are as follows: first,lack of financial flexibility will lead to the problem of insufficient investment in enterprises,while reserve financial flexibility can help enterprises alleviate the problem of insufficient investment to a certain extent,but a higher level of financial flexibility will increase the possibility of over-investment in enterprises.second,The increase of management's power will aggravate the principal-agent conflict and information asymmetry,and then worsen the problem of inefficient investment.The increase of management's power will worsen the problem of under investment and over investment in varying degrees.third,the management's power will be incorporated into the financial flexibility and inefficient investment model,and it is found that the management's power will weaken the financial to a certain extent Business flexibility can alleviate the problem of under investment and worsen the positive correlation between financial flexibility and over investment.Therefore,on the basis of the conclusion of this study,this paper puts forward three suggestions: enterprises should perfect the management system of corporate financial flexiblere serves.Actively reserve appropriate financial flexibility.From the inside and outside at the same time,strengthen the restraint and monitoring of management power,prevent management abuse of power to manipulate enterprise investment activities.build a good external environment to restrict inefficient investment behavior of enterprises.This paper makes innovations in the research perspective and content.In the study of the impact of financial flexibility on inefficient investment,innovative power factors of management are introduced,which is a internal governance mechanism,expands the research field of vision on investment efficiency,provides new ideas for improving academic research,expanding solutions to inefficient investment problems,and urges listed companies in China to cultivate awareness of reserve financial flexibility and pay attention to management power constraints.