Research On The Influence Of Convertible Bond Issuance On Enterprise Investment Efficiency

To promote high-quality economic development,improving efficiency is the way to go.Although the investment efficiency of China’s enterprises has been significantly improved with policy support,non-efficient investment behavior still cannot be completely avoided,and the phenomenon of under-investment and over-investment is prevalent in various industries.In recent years,with the strengthening of policy support,the convertible bond market has developed rapidly,and the scale and number of issuance have expanded significantly.As of the end of2022,there were a total of 490 subsisting convertible bonds in China,and the size of the convertible bond market has reached 837.973 billion yuan.Convertible bonds have gained the favor of more and more listed companies and have become one of their important financing tools to raise funds.As a financing method,convertible bonds will inevitably have an impact on subsequent investment behavior,plus the fact that convertible bonds have both equity and debt attributes makes them unique in terms of corporate governance and other aspects.The reasonable use of convertible bonds for financing is important to improve the efficiency of corporate investment and promote high-quality economic development.In this context,it is of extraordinary significance to study the impact of convertible bond issuance on corporate investment efficiency and analyze its transmission mechanism.Taking the A-share listed companies in C hina from 2015 to 2021 as the research sample,this paper first measured the corporate investment efficiency using the Richardson model,and then explored the relationship between corporate issuance of convertible bonds and investment efficiency using the PSM-DID method.O n this basis,this paper tested the influence mechanism fro m two perspectives of financing constraints and agency problems,and conducted a heterogeneity analysis based on the nature of property rights and firm size.Finally,a robustness test was conducted by changing the matching ratio and replacing the explanatory variables.The results of the empirical study show that(1)convertible bond issuance is significantly and negatively related to inefficient corporate investment,i.e.,convertible bond issuance improves corporate investment efficiency,and this effect is more prominent for inhibiting underinvestment.(2)Convertible bond issuance has a more prominent effect on the overall investment efficiency of state-owned enterprises,and the effect of convertible bonds is more significant for non-state-owned enterprises from the perspective of inhibiting underinvestment.(3)The inhibiting effect of convertible bond issuance on inefficient investment of large-scale enterprises is more significant than that of small-scale enterprises.(4)The impact mechanism of convertible bond issuance on enterprise investment efficiency is mainly reflected in alleviating financing constraints and reducing the second type of agency costs,but this paper does not find the transmission mechanism of the first type of agency costs.Taking convertible bonds as the research perspective,this paper examines the impact of convertible bond issuance on corporate investment efficiency and enriches the existing research on convertible bonds and investment efficiency.Finally,based on the researc h findings,this paper puts forward the following conclusions,taking into account the current situation of convertible bond market:(1)Actively promote the development of convertible bond market and improve the review mechanism of convertible bond issuance.(2)Combine financing methods with corporate governance and reasonably design the terms of convertible bonds.(3)Strengthen market supervision and information disclosure to protect investors’ capital safety.