On Financial Flexibility And Inefficient Investment Under Uncertain Condition

In recent years,the number of private enterprises in China is increasing rapidly,private enterprises are the most dynamic and key force of the economy of our country.While the complex and changeable external environment has put a serious impact on the investment efficiency of private enterprises.Investment is the engine of the economy.In the macro perspective of,investment,together with consumption and exports constitute the driving carriage promoting the economic to grow.In micro perspective,investment directly affects the efficiency of resource allocation and corporate value.Therefore,how to reduce the inefficient investment and improve the efficiency of resource allocationas become an urgent problem in the process of economic development.This paper mainly combines normative research method and empirical research method.Firstly,we makes a brief review of existing literature,put forward hypothesis on the basis of predecessors' research and make Chinese private listed companies from 2007 to 2014 as the research object.Then,using stata11.0 software,we analysis the correlation of environmental uncertainty and the investment efficiency.In order to investigate the influence of financial flexibility to the investment efficiency under environment uncertainty,we add a dummy variable “financial flexibility” to the model.Finally,we put forward policy suggestions correspondingly.The results show that the environment uncertainty will lead to the under investment.While this influence will be decreased when the financial flexibility is high.Results also show that the financial flexibility enterprises 25% ahead perform higher over investment level.That is to say,holding too much financial flexibility will lead to over investment.Soprivate enterprises should hold financial flexibilityappropriately.The innovation of this paper is mainly reflected in the following aspects: Firstly,We add the financial flexibility to the framework of environmental uncertainty and inefficient investment from the perspective of corporate financial policy.Secondly,as we take the private enterprises as the research object,these conclusions are of high value for the private listed companies to adopt financial flexibility policy flexibly and moderately to reduce inefficient investment under the uncertain environment.