Study On The Effect Of Financial Constraints On Investment Efficiency Based On Lifecycle Theory

With the rapid development of China's market-oriented economic,the lag of the capital market has greatly restricted the development of our enterprises.Enterprises have many other restrictions in financing channels,financing methods and financing conditions,in addition to the scarcity of financial resources and the asymmetry of capital market information,it is difficult for some listed enterprises in our country to obtain funds effectively through the external financing.These enterprises have to give up some good investment opportunities,and then the under-investment behavior arises.When enterprises have adequate free cash flow,the over-investment behavior maybe arise due to agency costs or other factors.Scholars have showed that many listed companies have under-investment behavior or over-investment behavior.Then the further study obtained two conclusions,firstly,financing constraints and lack of investment opportunities are the main causes of under-investment behavior,secondly,agency costs and adequate free cash flow are the main causes of over-investment behavior,but the financing constraints could relieve the over-investment behavior.During the different lifecycle,there are some differences in financial characteristics and governance structure of enterprises,and then are there some differences in the degree of financial constraints faced by enterprises among different lifecycle? Whether the form of enterprises investment efficiency is the same among different lifecycle? Whether the effect of financial constraints on underinvestment and over-investment is the same among different lifecycle? The existing literature doesn't systematically study the above three issues,therefore,this thesis is based on the lifecycle theory,and researches on the differences among different lifecycle in the degree of financial constraints,the form of investment efficiency and the effect of financial constraints on under-investment and over-investment.It is beneficial to find out the similarities and differences among different lifecycle,and then we can take measures to improve the investment efficiency and enhance enterprise value.This thesis uses the theoretical methods and empirical methods to study.Firstly,this thesis describes the research background,research significance and purpose,research ideas,research methods,research content and research framework.Secondly,this thesis systematically reviews the domestic and foreign literatures about the lifecycle,financing constraints and investment efficiency,and makes the literature review on the base of these literatures,and then put forward the research theme of this thesis.Thirdly,this thesis analyzes the relationship between financing constraints and investment efficiency on the base of relevant theories,and then defines the concept of lifecycle,financing constraints and investment efficiency.Fourthly,according to the researches of scholars and the actual situation of listed companies,this thesis puts forward the hypothesis based on the above theoretical analysis.In order to validate the above hypothesis,this thesis selects the listed manufacturing companies as the research object,and chooses reasonable methods to measure the variables and build the research model.Fifthly,this thesis uses empirical analysis to validate the above hypothesis,including descriptive analysis,correlation analysis and multiple linear regression analysis.Finally,this thesis obtains the conclusions according to the empirical analysis,and put forward the reasonable suggestions to enhance the investment efficiency,and summarize the shortcomings of this study.The main conclusions of this thesis as following: Firstly,the listed manufacturing enterprises have under-investment and over-investment behavior,under-investment behavior was significantly more than over-investment behavior.Secondly,the listed manufacturing enterprises have some financing constraints,and the degree of financial constraints is different when enterprises are in different lifecycle.Thirdly,the degree of financial constraints faced by listed enterprises is positively related to under-investment behavior,and the effect of financial constraints on under-investment is different among different lifecycle.Fourthly,the degree of financial constraints faced by listed enterprises is negatively related to over-investment behavior,and the effect of financial constraints on over-investment is different among different lifecycle.According to the above conclusions,this thesis puts forward different suggestions to enhance the investment efficiency for enterprises in different lifecycle,including strengthening the ability of enterprise finance,actively looking for favorable investment opportunities,strengthening the relationship between managers and enterprise value and the relationship between major shareholders and enterprise value,making full use of the constraints of financial constraints,strict controlling the managers' domination of funds.I hope these suggestions can provide references for improving the investment efficiency.