Financing Constraints And Enterprise Risks

Under the background of the continuing downturn of the world economy,"financing difficulty" has increasingly become an important factor hindering the development of enterprises and the recovery of China's economy.The problem of "financing difficulty" not only refers to the difficulty for enterprises to obtain financing,but also refers to the difficulty for enterprises to obtain enough funds at appropriate cost and in appropriate ways,that is,the problem of financing constraints of enterprises.A large number of studies have focused on the unique decision-making process and behavior of enterprises under strong financing constraints.The research finds that firms with strong financing constraints tend to choose more extreme investment strategies,which offset the impact of financing constraints on corporate value by supplementing more working capital,and some studies directly focus on the role of financing constraints on stock prices reflecting the long-term value of firms.A large number of studies have focused on the unique decision-making process and behavior of enterprises under strong financing constraints.The research finds that firms with strong financing constraints tend to choose more extreme investment strategies,which offset the impact of financing constraints on corporate value by supplementing more working capital,and some studies directly focus on the role of financing constraints on stock prices reflecting the long-term value of firms.Some scholars pay attention to whether the variation of enterprise behavior caused by financing constraints causes the change of enterprise risk.Has the capital market properly portrayed this change? This is the core issue of this paper.In view of this,this paper closely combines the current capital market development situation and economic development demand,from the theoretical and empirical aspects,trying to build a research and analysis framework of the relationship between financing constraints and corporate stock price volatility based on existing research,in order to be able to Make reasonable judgments on the investment risks caused by financing constraints,and provide evidence and analysis basis for market investors and policy-making authorities.Firstly,this paper sorts out the evolution of the relevant theories and measurement of financing constraints.Through the analysis and trade-off of different indicators of measurement financing constraints,this paper selects the multivariate synthetic indicators—KZ index and WW index.The method is to make a more objective comprehensive measurement of the degree of financing constraints of 624 sample companies in China's A-share listed companies from 2008 to 2017.Secondly,this paper deduces the transmission mechanism between financing constraints and enterprise risks from the perspective of investors and managers,and puts forward the hypothesis that there may be a direct effect between financing constraints and enterprise risks or an indirect mechanism mediated by enterprise investment variables.Thirdly,this paper focuses on the relationship between financing constraints and stock price fluctuations of listed companies.On the basis of theoretical argumentation and existing research,it pays attention to the formation process of stock price data of listed companies,introducing the volatility of stock price is intertemporal.The dynamic panel data model is used to empirically study the problem.The research shows that under the current economic environment and capital market development conditions in China,the financing constraint amplifies the stock price fluctuation of listed companies and increases the operational risk of Chinese enterprises and the investment risk of investors.Accordingly,policymaking authorities should continually pursue policies that reduce corporate financing constraints to reduce the likelihood of systemic risk formation.Then,this paper also uses the dynamic panel data model to test the transmission mechanism hypothesis between financing constraints and enterprise risks.The empirical results show that under the measurement of KZ index,there is only indirect effect between financing constraints and enterprise risks through the investment decision variables.Under the calculation of WW index,there are both direct and indirect effects.Finally,in view of the phenomenon of differences in financing constraints between different ownership enterprises that Chinese scholars often pay attention to,this paper further explores the differences between financing constraints of stateowned enterprises and private enterprises in China and the mechanism of stock price fluctuation by means of sub-sample study.The empirical results show that the capital market is more sensitive to the change of financing constraints of private enterprises,while the change of financing constraints of state-owned enterprises is relatively slow.