Study On The Influence Of Financial Flexibility On The Enterprises Investment With Different Property Rights Nature

In recent years, the strength of state policy of industrial upgrading and technological innovation is increasing. In this process, enterprises face a lot of potential investment opportunities and the threat of uncertainty of external environment. Therefore, how can enterprises improve ability to cope with the environment changes, to resist the impact of the incident and promptly seize the favorable investment opportunities, financial flexibility study became an important topic, but few combined with institutional background. In this paper, along the main line of establish driver and consumption of financial flexibility, we compare the difference characteristics of financial flexibility between state-owned enterprises and private enterprises, and its different impact on the investment behavior.In this paper, we used the balanced panel data of A-share listed companies in China from 2008 to 2014 to do empirical analysis. The empirical results show that enterprises with higher future investment opportunities will reserves more financial flexibility which can significantly improve the investment scale later. Financial flexibility performance and its support for the investment show obvious difference because of nature of property right. First, for firms with high investment opportunities, the state-owned ones reserves higher financial flexibility. Second, the private enterprises financial flexibility is more relevant to investment spending, financial flexible enterprise investment spending is significantly higher than the lack; but the performance in the state-owned enterprises is not obvious, whether with high or low financial flexibility, they tends to maintain a relatively average level of investment. Further study found that for enterprises with extremely high financial flexibility, private enterprises investment scale significantly higher than that of state-owned enterprises, for enterprises with extremely low financial flexibility, the opposite is true.Financial flexibility is a double-edged sword, it can alleviate private enterprises underinvestment while increase the inefficiency for the state-owned enterprise. It is significant to improve the fairness and efficiency of resource allocation.