| With the continuous development of market economy, the investment-cash flow sensitivity has gradually become a hot investment theory. The academic mainly focus on three aspects of the investment-cash flow sensitivity:the existence of the investment-cash flow sensitivity, the dominant factors of investment-cash flow sensitivity, the related application of investment-cash flow sensitivity. Recent studies on the investment behavior thought, a country or region’s political environment and institutional background will obviously affect the investment in the enterprise. Due to the development of China’s regional imbalance, the institutional environment is also unbalanced. On the basis, this paper focuses on the analysis of the effect of the institutional environment on the investment-cash flow sensitivity.This paper treats the marketization process, financial development, government intervention, the level of the rule of law as a proxy for institutional environment, choosing2001-2009non-financial A shares listed enterprises as samples, using FGLS regression analysis for studying the effect of the institutional environment on the investment-cash flow sensitivity. further, classify the samples by the area or the nature of the enterprise making sure that whether there is difference on the effect of the institutional environment on the investment-cash flow sensitivity. Through the empirical design of multiple angles, this paper catches some conclusions. The marketization process’s speeding up, financial development’s improving, the improvement of the level of the rule of law can all alleviate the financing constraint to some degree, and then reduce the investment-cash flow sensitivity. Due to the nature of the enterprises, the government intervention effecting on the investment behavior of the enterprises will take on obvious differences, therefore different influence on the investment-cash flow sensitivity. Thus, as study the effect of the government intervention on the investment-cash flow sensitivity, the nature of the enterprises should be considered as important factors.At last, this paper proposes some available suggestions, in the view of optimizing the investment behavior, according to the study of the effect of the institutional environment on the investment-cash flow sensitivity. |
