The Impact On Investment Behavior Of The Change In The Use Of Funds Raised From Corporate Convertible Bonds

Investment is one of the most important financial decision-making,and it is the foundation of the enterprise’s performance and value growth.Financing is one of the most important sources of capital for enterprises’ investment,and they are closely related and complementary.Convertible bond is a complex financial instrument,which has both the characteristics of both bond and stock.After 2017,the issue of convertible bond has increased sharply in our country.With the development of convertible bonds,the use of raised funds by some enterprises deviates from expectations,and the capital raised in convertible bonds will be changed,which will influence the investment behavior of the firm directly or indirectly.The change of the funds raised may have a direct impact on the investment projects of the enterprise on the one hand,and on the other hand,the change in raised funds triggers the additional sale-back clause of the convertible bonds,causing the sale-back,which may affect the investment behavior of the enterprise by influencing the cash flow,and may also affect the investment of the enterprise by influencing the stock price.On the other hand,the transformation of large shareholders and the increase in the proportion of shares will have some influence on the investment behavior of enterprises.Then,how will the change in the use of the funds raised by corporate convertible bonds affect the investment behavior?This paper adopts the case study method,selects Shanghai STEP Electric Corporation as the case company,analyzes the investment behavior of Shanghai STEP Electric Corporation from the aspects of investment scale,investment structure,investment efficiency and investment effect,and explores the change of the investment behavior after the change of the use of funds raised by convertible bonds more comprehensively and deeply,and puts forward corresponding suggestions.Based on the analysis,we got the following conclusions: First,the inadequate research of the corporate management on the investment projects is an important reason for the change in the use of the funds raised by the convertible bonds.Second,both the enterprise and the investors need to dialectically view the impact of the change in convertible bonds’ raised funds on the investment behavior.Third,under the new market environment and technological conditions,the enterprise reassesses and judges the original investment projects and chooses to change the use of the funds raised by the convertible bonds,which does not mean that the value of the enterprise can be continuously improved.In this regard,the following suggestions are put forward: Enterprises need to make adequate preparation for the raised projects,and when faced with that the raised projects do not meet expectations,they need to carefully consider whether to change the use of the funds raised by the convertible bonds.At the same time,the securities market still needs to strengthen supervision to protect the effective use of funds.The main contributions in this paper are as follows: The current literature on the utilization of the funds raised mainly focuses on the equity financing,and mostly adopts the way of empirical research to investigate the causes and economic effects of the change in the use of funds.This paper uses the case study method,based on the background of the change in the use of the funds raised by the convertible bonds,to study the changes in corporate investment behavior after the change in the use of the raised funds.It not only provides case support for the research of fund raising change,but also helps enterprises to correctly understand the impact of fund raising change of convertible bonds and provide support for relevant decisions.The inadequacies of this paper lie in: First,this paper selects a single company of Shanghai STEP Electric Corporation as a case study,the number of research samples is limited,at the same time,there is the possibility of incomplete corporate information disclosure,which may lead to some limitations in the conclusions of this paper.Secondly,in addition to the change of raising funds,the decision-making of corporate investment behavior is also affected by many factors.This paper only discusses corporate investment behavior from the perspective of the change of convertible bonds raising funds,and the evaluation index of corporate investment behavior in this paper may not completely cover all aspects of corporate investment behavior,which leads to the conclusion of this paper has certain limitations.