Analysis On Financial Conservative Behavior Of Listed Companies

According to the early theory of capital structure,enterprises tend to choose debt financing when making financial financing decisions.However,some Western scholars have found that the debt ratio of many enterprises is generally lower than the optimal debt standard,and the tax shield effect of debt does not play a role in practice.Chinese scholars have found that Chinese companies are generally less motivated to use debt.The phenomenon that companies maintain low financial leverage for a period of time is called financial conservatism.The academic community has given different interpretations of the company's financial conservative behavior.Early scholars believe that because of the capital market financing environment and policy factors,the difference in financing costs is the reason for corporate financial conservative behavior.Later,from the perspective of corporate governance,some scholars believe that controlling shareholders and actual controllers are important factors in corporate financing decisions.Today,with the rapid development of the economy,the survival pressure of listed companies has become increasingly severe,and market competition has become increasingly fierce.Enterprises must be cautious in choosing financial financing decisions,and various macro and micro factors will directly affect the level of debt structure of enterprises.This paper uses the literature review method and the case study method to sort out relevant literatures on financial conservative behavior at home and abroad,and combines cases to study the single individual of Foshan Lighting from the financial conservative behavior of the enterprise,and analyzes the motivation and performance of adopting financial conservative strategies..In the case introduction part,first of all,the general situation of China's lighting industry,followed by the basic situation of Foshan lighting enterprises.Secondly,this paper analyzes the motivation of Foshan Lighting's choice of financial conservative financing strategy and analyzes its financial performance from the perspectives of corporate financial perspective,governance perspective,business model perspective and product market competition perspective.This paper has the following significances: it provides a case basis for the financial conservative behavior of listed companies in China,and also enriches the relevant literature on the economic consequences of corporate financial conservative behavior from the perspective of financial flexibility hypothesis and product market competition hypothesis.By analyzing the relationship between Foshan Lighting's financial conservative strategy and its market performance,the theory of financial flexibility hypothesis is verified to some extent.At the same time,research on the adoption of financial conservative financing strategies for companies also helps market investors.Investors should make rational judgments based on the financial behavior of listed companies and the financial situation of the company and measure the investment risks to ensure their correct investment.Finally,the phenomenon that China's listed companies abandon the debt tax shield effect is worthy of scholars to examine this accounting behavior.