Financing Constraints,Internal Control And IT Investment

Under the impetus of the third information technology revolution,information technology has become a new engine to drive economic development since World War II.With the rapid development of global information technology,developing information technology is an unavoidable step for China to fully adapt to the changing times from the standpoint of the country and society.At the moment,Chinese businesses are actively engaged in information construction.However,during the construction process,it was discovered that,on the one hand,information technology investment has the characteristics of a long investment cycle,large investment funds,and high investment risks;on the other hand,enterprises face the problem of difficult and expensive financing,which limits their ability to invest in information technology.Furthermore,because of the different financing constraints and development characteristics of enterprises in different life cycles,there is no uniform method for all enterprises to promote information technology investment.This paper investigates the relationship between financing constraints,internal control,and information technology investment from the perspective of different enterprise life cycles,as well as the differences between financing constraints,internal control,and information technology investment in different regions and the nature of equity.This paper separates the information asymmetry theory,principal-agent theory,transaction cost theory,and life cycle theory based on data from 2014 A-share listed companies from 2012 to 2021,and divides the enterprise life cycle into growth,maturity,and decline periods.On this basis,this paper investigates the impact of financing constraints on information technology investment across life cycles,as well as the regulatory role of internal control in the relationship between financing constraints and information technology investment,and makes theoretically derived assumptions.The hypothesis is then empirically validated,and the impact of regional and equity nature differences on the relationship between financing constraints,internal control,and information technology investment is investigated further.Finally,pertinent suggestions are made.According to the findings of the preceding research,(1)under other conditions remaining constant,financing constraints will inhibit enterprise information technology investment,with financing constraints of enterprises in the central and western regions having a greater inhibitory effect on information technology investment than those in the eastern regions,and financing constraints of state-owned enterprises having a lower inhibitory effect on information technology investment.(2)Under certain other conditions,internal control can effectively alleviate the restraining effect of financing constraints on information technology investment,with enterprises in the central and western regions having a stronger regulatory effect than enterprises in the eastern region,and state-owned enterprises having a lower regulatory effect than non-state-owned enterprises.(3)At various stages of the enterprise’s life cycle,compared with the mature period,the financing constraints of enterprises inhibit IT investment more strongly during the growth and recession periods.(4)Compared with the growth period,the internal control of enterprises in the mature period and the recession period can more significantly alleviate the inhibitory effect of financing constraints on information technology investment...