China It Business Investment Spending And Internal Cash Flow Sensitivity

The fund that enterprise's investment activity needs stems from two respects: Outside financing and inside financing. Under the perfect capital market environment, the cost of outside and inside financing is the same. But because of information asymmetry in the capital market in reality, the capital market is not perfect. Under this kind of imperfect capital market environment, enterprises will be restrained by financing while carrying on outside financing. Outside financing cost and inside financing cost are different. Generally speaking, the cost of outside financing should be greater than the inside financing cost. So enterprises will have a partiality for the inside financing way with lower cost when financing for the investment project; The stronger the outside financing restrains that enterprises receive, the greater partiality enterprises have for using inside financing.The internal cash flow is the important embodiment of inside financing ability of enterprises. This thesis regards internal cash flow as the embodiment of inside financing ability of enterprises. While enterprises face the financing restrains in various degrees, how to change of the sensitiveness of investment and internal cash flow, that is to study the influence of the internal cash flow fluctuation to investment. This thesis combines theory analysis with real example analysis together, analyzing the relation between the investment and internal cash flow in terms of theory. Relying on financial data to establish the concrete index of internal cash flow and investment, regarding financial data which stock markets of Shanghai and Shenzhen IT listed company of our country announced in 1998-2002 as samples and regarding paying rate of the cash dividend as financing restrain standard of dividing samples into groups, this thesis examines the relation between investment and internal cash flow through real examples. The research purpose of this thesis lies in announcing that when enterprises face the outside financing restrain in various degrees, the impact on th*e investment activities of enterprises of fluctuation of the internal cash flow. This research choose have theory meaning and using value to choosing financing channel rationally and promoting enterprise value.Through the positive research, this thesis gets the following conclusion: (1) The paying rate of the cash dividend can be as the standard that IT enterprises receive financing restrain. (2) The investment of IT listed company of our country has sensitiveness to the internal cash flow, and this kind of sensitiveness is strengthened as it is strengthened that enterprises receive the outside financing restrains. (3) As time goes by, the sensitiveness of investment to the internal cash flow of IT listed company of our country becomes strengthen gradually. That is to say, the risk that the fluctuation of the internal cash flow brings to investment activity is strengthened gradually.