An Empirical Study Of The Influence Of Agency Conflicts On The Financial Flexibility

Today’s world economy is in a weak recovery period,the economic globalization has brought opportunities and challenges,the economic crisis from the capital market spread to the real economy,enterprises in which the business environment is full of uncertainty.In the ever-changing competitive market,enterprises on the one hand to fully prevent the impact of uncertain events,on the other hand have to grasp the investment growth opportunities.Financial flexibility as an important strategic resource reserve,through the financial flexibility to prevent and use the property,can effectively help enterprises in a turbulent environment to gain a competitive advantage.At present,the researches on financial flexibility in the theoretical circles focus on the economic consequences of financial flexibility,such as the impact of financial flexibility on the efficiency of enterprise investment and the value of enterprises,and rarely involves the study of causes of financial flexibility,and the internal governance structure has an important impact on capital structure decision-making,so this paper select the perspective of agency conflict to study the relationship between corporate governance and financial flexibility.Financial flexibility mainly comes from the level of cash holdings and the ability to borrow.Therefore,this paper selects cash flexibility and debt flexibility to measure financial flexibility.Ownership concentration and equity balance are selected to measure the agency conflict between major shareholders and small shareholders.The size of the board,the proportion of independent directors,the proportion of management shares and executive compensation are selected to measure the agency conflict between shareholders and managers.In this paper,1561 listed companies in Shanghai and Shenzhen A-share listed companies from 2009 to 2015 are selected as the research object.The empirical results show that the ownership concentration has a significant positive effect on cash flexibility,debt flexibility and financial flexibility,has a significant negative impact on cash flexibility,debt flexibility and financial flexibility.There is a significant U-shaped relationship between management shareholding and cash flexibility,and there is a positive relationship between management shareholding and debt flexibility and financial flexibility.There was no significant impact on the relationship between the size of the board,the proportion of independent directors and executive pay.The possible causes and related recommendations and future prospects are discussed.