The Effect Of Financial Flexibility On Inefficient Investment

Business investment is the core of the company’s financial behavior factors, the efficiency of investment or not will not only directly affect the enterprise’s operation and development, but also related to resource allocation efficiency of the whole national economy and people’s livelihood. Since the reform and opening, our country scholars generally probe into the inefficient investment from the financing preference of listed companies, only a few with financial flexibility as the breakthrough point.Although a few documents involved in the field, few scholars based on the perspective of property rights to study flexible financial impact on the efficiency of investment.In this paper, We study flexible financial impact on the inefficient investment mechanism from the Angle of property rights through empirical research for, so as to provide our country reference and enlightenment abour the investment efficiency of listed company governance issues and flexible financial economic research.Firstly, this paper introduces the research background and research significance, and briefly expounds the research contents, research methods and its innovation.Then, through to the domestic and foreign relevant financial flexibility, property rights and the efficiency of investment relations carries on the regression and review of the literature, so as to provide corresponding theoretical basis for subsequent empirical research.Secondly, to meet the conditions in this paper,2009-2013 screening 7562 Shanghai and shenzhen two city a-share listed companies in our country conducted descriptive statistical analysis, get the original hypothesis.Then, through improved Richardson, residual model and build multivariate linear regression model, the empirical test the correctness of the above hypothesis, and further robustness inspection by using the method of substitution variables, together to enhance the reliability of the research conclusion.In this paper, empirical research results are as follows:(1) the financial flexibility can mitigate the phenomenon of lack of investment of enterprises, namely the financial flexibility and underinvestment in negative correlation.(2) the financial flexibility to non-state enterprises phenomenon of inadequate investment of reduce degree is large state-owned enterprises;Additional financial flexibility on the degree of ease local holding enterprises investment insufficient phenomenon is the central holding companies.(3) financial flexibility can aggravate the enterprise over-investment phenomenon, namely the financial flexibility and excessive investment are related.(4) the financial flexibility to state-owned enterprises over-investment phenomenon aggravate degree of non-state enterprise;Flexible financial investment to local firms phenomenon aggravate degree of a central holding companies.Finally, in view of China’s listed companies on the issue of the financial flexibility and the efficiency of investment, financial flexibility, establishing reasonable timely put forward positive reserves "financial flexibility-investment" early warning system and strengthen the regulation of company the three countermeasures, in order to provide some reference for corporate governance, then points out the shortcomings in the research on the paper.The innovation of this paper has the following three features:(1) The total sample is divided into state-owned enterprises and non-state-owned enterprises considering the nature of property rights of enterprises in our country.State-owned enterprises is a mainstay of the economy in our country, this article will further divides samples of state-ownded companies into the central holding companies and local holding companies to study deeply on the relationship between financial flexibility and inefficient investment,so as to put forward the corresponding policy recommendations.(2)The article tries to conclude from the excess cash holdings and the rest of the ability to borrow.On one hand,from the financial flexibility, ease the financing constraints, inhibiting investment insufficiency;On the other hand, the financial flexibility increases the agency problem, intensifing overinvestment.The study tries to analize flexible financial impact on the efficiency of investment from the two paths,providing new train of thought for enterprise financial management.(3) This paper respectively enrich the financial flexibility measure range and enhances the empirical study on the accuracy of the data in this paper using continuous variables and virtual finance from the Angle of quantitative and qualitative two flexible measurement.