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Construction Of Financial Constraint Index And Its Application

Posted on:2013-09-23Degree:MasterType:Thesis
Country:ChinaCandidate:M ZhuFull Text:PDF
GTID:2249330371968696Subject:Western economics
Abstract/Summary:PDF Full Text Request
This paper uses the financial data of China’s listed companies from 1999 to 2010, and Logistic regression model, constructs an index to measure company’s external financial constraints. Finally this paper constructs an index to of financing constraints measurement, which is at a high level of correction. Then, this paper uses "investment-cash flow sensitivity" tool, which is widely used in the theory of corporate finance research, and does an indirect evaluation on the previously built financing constraint index evaluation. Ultimately we find that investment-cash flow sensitivity of higher financial constraint set were significantly higher than the group of low financial constraints companies. According to FHP (1988), financial constraint index that we build is a relatively good index to reflect the differences of financial constraints of China’s listed companies.
Keywords/Search Tags:Financial constraints, Financial constraints index, Invcstment bebavior, lnvestment-cash flow sensitivity
PDF Full Text Request
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