Industry-finance Integration And The Dynamic Adjustment Of Corporate Financial Flexibility

With the development of global economic integration,increased competition among enterprises,increased uncertainty in operations,broken capital flows and missed investment opportunities are likely to cause fatal blows to companies.At the same time,Chinese companies generally face financing constraints.In this case more and more companies have retained appropriate financial flexibility through financial policy arrangements such as high cash holdings or low financial leverage,in order to provide a buffer for the company's future operating uncertainty and reduce the constraints of financing constraints on corporate development.It is worth noting that the financial flexibility is not as high as possible,and too high financial elasticity is more likely to cause agency problems that will damage corporate value.Under such a background,how to make scientific and effective adjustments according to changes in the external environment has become a very important issue in enterprise development.After 2009,with the introduction of a series of government policies to encourage the integration of industry and finance,China's domestic industry-finance integration has entered a period of rapid development.More literature confirms the role of industry-finance integration in easing the financing constraints of physical enterprises,so will industry-finance integration have an impact on the financial flexibility of enterprises?This article takes China's A-share non-financial listed companies as research samples from 2009 to 2018.From a dynamic perspective,it explores the impact of the industry-finance integration on the adjustment speed and deviation of financial flexibility,and uses market competition as the adjustment variable to test whether the relationship between them is same in different market competition samples.In addition,this article further explores whether the impact of the industry-finance integration on the adjustment speed of financial flexibility exists heterogeneity under different deviations of financial flexibility and different types of industry-finance integration.The study found that the industry-finance integration has increased the adjustment speed of financial flexibility and reduced the deviation of financial flexibility,and this effect is more significant in industries with fierce market competition.At the same time,compared with the upper financial flexibility group,the effect of the industry-finance integration to increase the adjustment speed of financial flexibility is more significant in the lower financial flexibility group,and the holding banks,securities,funds,financial companies and leasing companies can effectively improve the adjustment speed of financial flexibility.However,shareholding insurance companies will not have a significant impact on the speed of financial flexibility adjustment.The innovations of this article are:(1)The existing literature explores the impact of the industry-finance integration on financial decisions such as cash holdings or capital structure,but most of them discuss the relationship between them from a single aspect of cash level or debt level.This article incorporate cash and liabilities into a unified analysis system and construct comprehensive indicators of financial flexibility to explore the impact of the industry-finance integration on financial flexibility.(2)The current research on financial flexibility is mostly from a static perspective,and rarely considers the dynamic adjustment of financial flexibility.This article explores the impact of the industry-finance integration on the dynamic adjustment of corporate financial flexibility.From the perspective of adjustment cost and adjustment inertia,the logical relationship is established,which complements and improves the research framework of the dynamic adjustment of financial flexibility.(3)Measure the industry-finance integration from multiple dimensions.After examining the relationship between industry-finance integration and the dynamic adjustment of financial flexibility,further analyze whether the relationship between the two exists heterogeneity under different product market competition,financial flexibility deviation direction and type of industry-finance combination.