Financial Ecological Environment、The Quality Of Internal Control And Financing Constraints

Nowadays,a common phenomenon exists in Chinese capital market:companies’financing channels are blocked.Or although possibly there are several financing channels,external financing cost is higher than internal cost of capital.This phenomenon is normally regard as financing constraint.The year 2016 is the first year of the 13th Five-Year Plan,people from all walks of life should work together to achieve the great goal of building a moderately well-off society in all-around way.Particularly,as main force of socialist economic market in our country,every firm shall make some contributions in response to the national strategy mentioned above.Therefore,how to deal with financing constraints commonly faced by firms and promote their development by leaps and bounds appeals extremely vital now.Information asymmetric and principal-agent problems determines the degree of financing constraints faced by firms.Philosophy believes that external factors become operative through internal factors.Hence,both external factors and internal factors should be considered in order to solve financing constraints faced by companies in our country.In this paper,the author selects financial ecological environment as an external factor,a new and increasing important concept which reflects financial environment in macro level.There are rich meanings behind the word ’financial ecological environment’,involving financial development,political governance,economic base,institutional culture,and so forth.The author chooses internal control quality of firms as an internal factors,as high quality of internal control could become a good signal for external investment.Under the instruction of the signal,information asymmetry between companies and external investors can be reduced,thus relieving financing constraints.First,this paper conduct a research on the influence of the external factor,financial ecological environment,on enterprise financing constraints based on a whole sample.Second,the paper further researches that influence by separating property right categories.In the end,the paper researches on how internal control with different qualities will adjust the way that financial ecological environment affects financing constraints.Finally,this paper draws conclusions as followings:The more consummate financial ecological environment and its four dimensions are,the less financing constraints listed firms are faced with.Under the same conditions,Compared with the enterprise which has high quality of internal control,The more consummate financial ecological environment is,the less financing constraints the enterprise which has low quality of internal control are faced with.The contribution:based on the thought "external factors become operative through internal factors",the paper researches on how internal control with different qualities will adjust the way that financial ecological environment affects financing constraints.The author hopes that results from this paper can provide creative ideas for relieving financing constraints faced by listed companies,completing their governance structures as well as promoting sustainable development of capital market.