Legal Litigation、Analyst Following And Financing Constraints

In the 40 years since the reform and opening up,private enterprises have gradually become an important force for China’s economic development.However,the development path of most private enterprises is not smooth,and many of them are facing serious financing constraints.At the same time,with the acceleration of the rule of law in China,company lawsuits are increasing year by year.When companies face uncertain events such as lawsuits and arbitrations,investors and creditors will make varying degrees of risk aversion behavior,how to ensure the normal operation of the company problems such as maintaining basic cash flow and reducing the increase in financing costs caused by enterprises are worth investigating.Based on the theory of information asymmetry,the article first deduces the relationship between legal litigation,analysts following,and financing constraints from a theoretical level.Second,based on the hypothesis of empirical test,analyze and verify the impact of legal litigation on financing constraints,and analyst following influences the relationship between legal litigation and financing constraints.Through group inspection of the company’s information transparency and litigation subject,it further explores the influence path that analyst following influences the relationship between legal litigation and financing constraints.In the end,it is concluded that legal litigation will aggravate the financing constraints of private enterprises,and analyst following can alleviate the negative impact of legal litigation on financing constraints and play a positive and positive regulatory role.Finally,based on the relationship between legal litigation,analyst following and financing constraints,suggestions are made,and private companies are expected to establish a sound information disclosure system;analysts must continuously improve their professionalism and professional ethics;the government should regulate analysts’ industry behavior improve the information disclosure system and strengthen supervision of it to protect the interests of investors and creditors and ease the financing constraints of private enterprises.