Research On The Impact Of Financing Constraints On Enterprise’s Total Factor Productivity And Its Mechanism

Total factor productivity(TFP)is the comprehensive results of the operation and management of a firm,and could be a good criterion to measure the quality of economic development.It is an inevitable choice to enhance TFP for the sustained and healthy growth of economic development in China.Capital is the necessity for a firm in its regular activities of production,sales,and investment.Under the background of our country,insufficient capital market and limited financing channels make the problem of financing constraints especially prominent.Financing constraints are influencing factors when it refers to the promotion of TFP.Although existing literature has researched the relationship between financing constraints and TFP from various perspectives,there is still further space to explore from the point of decomposition of TFP and threshold effect.Therefore,it is of major significance both in theory to enrich the research on economic consequence of financing constraints and in practice to enhance TFP,to analyse the impact of financing constraints on enterprise’s TFP and its mechanism based on the decomposition of efficiency.The 15687 sample data of the thesis originate from 1841 listed companies with A shares in Shanghai and Shenzhen stock markets in China from 2011 to 2019.Having reviewed and combed the existing literature,and guided by the agency theory,asymmetric information theory,technical innovation theory and human capital theory,this thesis systematacially analyses the direction,extent and mechanism of the impact of financing constraints on enterprise’s TFP,and carries on necessary empirical tests.The main research tasks of this thesis are as follows: Firstly,an overall design is made for the research,which includes putting forward the research hypotheses according to theoretical analysis and building research models,such as fixed-effect panel model,panel threshold model,moderating effect model,etc.Secondly,by acquiring DEA-Malmquist index,this thesis tests the direction,extent,and heterogeneity concerning the impact of financing constraints on enterprise’s TFP and the decomposed efficiencies,in which various methods are used including descriptive statistical analysis,cluster analysis,grouped tests,fixed-effect panel model,etc.Panel threshold model and grouped tests are applied for investigating the structural feature concerning the impact of financing constraints on TFP,and the specific value of the threshold is obtained.Main robust tests of this stage include altering main variables,expanding observation period of the samples,building simultaneous equations,and using extended control variables.Thirdly,through decomposition of TFP and by methods of descriptive statistical analysis,grouped tests,and moderating effect model,this thesis tests the moderating effect of the internal and external mechanism concerning the impact of financing constraints on enterprise’s TFP,then adopts necessary robust tests such as altering main variables,increasing lag phases,and using extended control variables.Finally,policy suggestions are put forward reference to the empirical conclusions of this thesis.The main conclusions of this thesis include:First,financing constraints have statistically significant negative impact on enterprise’s TFP,which manifests some heterogeneity characteristics,especially inhibiting the TFP of non-state companies,small or medium-sized companies,technology density companies,and labour density companies.Through decomposition of TFP,it can be found that there is different impact of financing constraints on technological progress efficiency(TC),pure technical efficiency(PEC)and scale efficiency(SEC): insignificant negative impact is exerted on TC,significant positive impact on PEC,and significant negative impact on SEC.The combined effect of the decompositions appears as the inhibition of financing constraints on TFP.Second,the impact of financing constraints on TFP has structural feature.There is a single threshold relevant to TFP,which exhibits a significant increase of negative impact beyond the threshold.Tests on the decomposed efficiencies show that there is a single threshold relevant to TC,beyond which the negative impact of financing constraints becomes more significant and stronger.There is a single threshold relevant to SEC,beyond which the impact of financing constraints changes from significantly positive to significantly negative.No significant threshold effect is detected relevant to PEC.Third,the internal mechanism has moderating effect concerning the impact of financing constraints on enterprise’s TFP,including innovation activities,human capital investment and managerial ability.(1)Innovation activities positively mediate the impact of financing constraints on TFP significantly,especially mitigating the restrictive effect of financing constraints on TFP in non-state companies,small or medium-sized companies,technology density companies,and labour density companies.The positive moderating effect of innovation activities becomes more significant and stronger beyond the threshold value.Tests on the decomposed efficiencies show that innovation activities negatively mediate the impact of financing constraints on TC significantly,but on PEC positively and significantly,on SEC insignificantly.(2)Although the whole moderating effect of human capital investment is insignificant,it negatively mediates the impact of financing constraints on TFP significantly in non-state companies,small or medium-sized companies,and labour density companies.By contrast,moderating effect is positive and significant in technology density companies.Beyond the threshold value,the moderating effect of human capital investment changes from positive to negative significantly.Moreover,the positive moderating effect would become more significant and stronger with the increase of lag phases.Tests on the decomposed efficiencies show that human capital investment positively mediates the impact of financing constraints on TC and PEC significantly,but insignificantly on SEC.(3)Managerial ability negatively mediates the impact of financing constraints on TFP significantly,especially aggravating the restrictive effect of financing constraints on TFP of non-state companies,small or medium-sized companies,technology density companies,and labour density companies.The negative moderating effect of managerial ability becomes more significant and stronger beyond the threshold value.Tests on the decomposed efficiencies show that managerial ability negatively mediates the impact of financing constraints on PEC significantly,but insignificantly on TC and SEC.Fourth,the external mechanism has moderating effect concerning the impact of financing constraints on enterprise’s TFP,including Economic Policy Uncertainty(EPU)and marketization.(1)EPU negatively mediates the impact of financing constraints on TFP significantly,especially aggravating the restrictive effect of financing constraints on TFP of non-state companies,small or medium-sized companies,and labour density companies.The negative moderating effect of EPU becomes more significant and stronger beyond the threshold value.Tests on the decomposed efficiencies show that EPU negatively mediates the impact of financing constraints on TC and PEC significantly,but on SEC positively and significantly.(2)Marketization positively mediates the impact of financing constraints on TFP significantly,especially mitigating the restrictive effect of financing constraints on TFP of big companies and technology density companies.The positive moderating effect of marketization becomes more significant and stronger beyond the threshold value.Tests on the decomposed efficiencies show that marketization positively mediates the impact of financing constraints on TC and PEC significantly,but insignificantly on SEC.The main contributions of this thesis are as follows:First,the study of this thesis expands and enriches the research contents about the impact of financing constraints on TFP.Existing literature is weak in the micro level research on TFP based on decompositions.Based on DEA-Malmquist index and the sample of listed companies,this thesis tests the influence of financing constraints on both the total level of TFP and its decompositions,and proposes the heterogeneity analysis according to property rights,the scale,and the factor intensity of enterprises respectively.Second,this thesis expands and supplements the field of financing constraints’ economic consequence with new methods.By applying panel threshold analysis to the field of financing constraints’ economic consequence,this thesis implements systematic analysis and tests on the structural feature concerning the impact of financing constraints on TFP,and acquires the specific threshold value.Third,this thesis provides new empirical evidence for the mechanism research on the impact of financing constraints on TFP.It would be useful for the listed companies to tackle the problem of financing constraints and therefore to enhance TFP,and constructive for the government to formulate relevant policies.This thesis tests the mechanism of financing constraints’ impact on TFP systematically.The internal mechanism concerns innovation activities,human capital investment and managerial ability.The external mechanism concerns EPU and marketization.The empirical conclusions would have reference value both in theory and in practice.