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Research On The Influence Of Financial Flexibility On Enterprise Value Under Different Competitive Strategies

Posted on:2020-01-24Degree:MasterType:Thesis
Country:ChinaCandidate:Y H GeFull Text:PDF
GTID:2439330572486909Subject:Accounting
Abstract/Summary:PDF Full Text Request
With the development of information technology,enterprises are facing an increasingly uncertain environment.Especially for the manufacturing industry,the development of 5G,artificial intelligence,industrial Internet and other new technologies have brought new opportunities and challenges to it.Enterprises should make dynamic adjustments driven by technology improvement and policy changes so as to seize good investment opportunities and deal with risks brought by uncertainties.Dynamic capability theory suggests that enterprises must enhance adaptability to maintain competitive advantage in a dynamic environment.One of the most important points to improve the dynamic resilience is to improve the financial flexibility of enterprises,so that enterprises can still timely raise funds in a low-cost way when faced with imperfect external markets and financing constraints,and thus help enterprises buffer the crisis or grasp favorable investment opportunities,so as to maximize enterprise value.Apart from impacts of uncertainties of external policies and capital market,the reserve of financial flexibility of an enterprise will also be affected by different competitive strategies which lead to difference in enterprises risks and capital demands.For this reason,impacts of financial flexibility on enterprise value will also be different.Based on this,through summarizing and analyzing related literature on enterprise value and on financial flexibility domestically and internationally,this paper finds that there is no unified theory about the relationship between enterprise value and financial resilience,although there have been research about it.Some scholars hold that it is an linear relationship but others think it is non linear.Moreover,research before do not take into consideration impacts of competitive strategies on the relationship.Therefore,taking A-share manufacturing listed companies in Shanghai and Shenzhen from 2013 to 2017,this paper studies the relationship between enterprise value and financial flexibility through building a comprehensive index of financial flexibility,studies the relationship between competitive strategy and enterprise value and impacts of competitive strategy on the relationship between enterprise value and financial flexibility through principal component analysis to work out differentiated factor and low-cost factor for measuring two different competitive strategies,and studies differences in the relationship between enterprise value and financial flexibility under different competitive strategies by using cluster analysis to divide sample enterprises into two groups based on different competitivestrategies.Through empirical analysis,this paper finds that there is a significant positive correlation between financial flexibility and enterprise value,that is,the increase of financial flexibility is conducive to the improvement of enterprise value.Through regression analysis of two competitive strategy factors and enterprise value,this paper finds two competitive strategies can both promote enterprise value and that the differentiation competitive strategy promotes more.Through regression analysis of competitive strategy and financial flexibility of interaction item,this paper finds the coefficient of interaction item is bigger and more significant.Moreover,regression analysis comparisons of sample enterprises divided by cluster analysis show that regression coefficient of financial flexibility is bigger under differentiation competitive strategy.Therefore results of two regression analyses suggest that differentiation competitive strategy can make increased financial flexibility promote more in enterprise value when compared with low-cost competitive strategy.Finally,based on the research conclusion coupled with actual characteristics of China’s manufacturing listed companies,this paper puts forward corresponding countermeasures and suggestions in order to increasingly promote value improvement these companies.
Keywords/Search Tags:Financial flexibility, Differentiation competitive strategy, Low-cost competitive strategy, Enterprise value
PDF Full Text Request
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