An Empirical Study On Investment Financing Constraints Of Chinese Listed Companies

According to the MM theory, in the ideal case of perfect markets, investment strategy and capital structure are irrelevance. However, due to asymmetric information, principal-agent problem and transaction cost, the perfect market does not exist in real capital markets, the cost of internal and external funds are not consistent, making the companies subject to financing constraints.Base on the theory and literature at home and abroad, we build an investment stochastic frontier equation to find the influencing factors of investment expenditure and financing constraints, and use the efficiency of investment to measure the degree of the financing constraints, using data samples between2003and2010, from368companies in11industries in Shanghai and Shenzhen A-share market. At last, we classify the samples in accordance with the assets size, industries and geographic areas to study the difference in financing constraints from different corporate of different characteristics.The results show that Chinese enterprises generally suffer serious financing constraints. Investment spending is proportional to Tobin’s Q value, revenue ratio and the amount of cash, and accounts payable in inverse proportion. Financing constraints and cash flow, asset size, ownership concentration, as well as asset-liability ratio are inversely proportional. For further research to explore the impact of corporate characteristics on financing constraints, and against to the dependence of the monotony of the classification criteria on the study of financing constraints in the past literature, this article examines the firm size, industry attribution and geographical impact of financing constraints. From the perspective of the firm size, investment efficiency and firm size does not exist monotonic relationship in the strict sense; from the industrial point of view, the efficiency of investment in traditional manufacturing industries is relatively lower than the new booming industry; from a regional point of view, China’s central and western regions suffer stronger financing constraints than the eastern region. Finally, according to the above results, we give some recommendations to improve the status of corporate financing constraints from the perspective of company and government.