Study On The Impact Of Product Market Competition On Maturity Mismatch Of Investment And Financing

Risk management is essential to ensure smooth operations and improve profitability,and among the many risks that need to be managed,maturity mismatch is a prevalent and often overlooked potential threat.Under the imperfect and unsound development of China’s capital market,the competition in the product market will,through the customer competition effect,release limited long-term funds to "high-quality customers" with better profitability and lower risk of default,while enterprises that cannot obtain long-term loans can only borrow short-term to support their investment needs for long-term assets,thus This causes the maturity mismatch between investment and financing.The problem of maturity mismatch of investment and financing is widespread in Chinese enterprises,and academic research on maturity mismatch of investment and financing is being gradually improved.In the previous literature,most of the studies have been conducted from institutional defects,inflation or micro-firm level factors,while few scholars have considered the influence from product market competition,and even fewer scholars have explored the mechanism of the interaction between the two.To this end,this paper constructs indicators to measure the degree of product market competition and the degree of maturity mismatch of corporate investment and financing based on the existing literature,and studies the impact of product market competition on the maturity mismatch of corporate investment and financing.The findings of the study can provide some reference for enterprises to cope with the increased product market competition and alleviate the investment and financing maturity mismatch problem.This paper examines the impact of product market competition on the maturity mismatch of corporate investment and financing as the main issue,and further explores the impact mechanism and moderating effect between the two.Specifically,first,this paper compares and reviews the literature on product market competition and maturity mismatch of investment and financing,and extracts as much information as possible that is helpful to this paper;second,this paper summarizes the bankruptcy threat theory,customer competition theory and proprietary cost theory of information disclosure of product market competition and the cost of capital theory and alternative choice theory of maturity mismatch of investment and financing,and combines the existing literature.Third,the paper selects all listed A-share companies in Shanghai and Shenzhen from 2003 to 2020 as the sample,and uses multiple linear regression to verify the major hypotheses of the paper;Fourth,in order to ensure the robustness of the underlying model,the paper conducts robustness tests,which include the following methods: subsample regression,first-order difference,alternative Finally,based on the empirical results of this paper,the conclusions and policy recommendations of this paper are presented,and the outlook is based on them.This paper finds that the competition in the product market aggravates the maturity mismatch of corporate investment and financing,i.e.,the more competitive the product market is,the more serious the maturity mismatch of corporate investment and financing in the industry.Through the mechanism study,we find that surplus management,financing constraints,and borrowing term structure play a mediating role in the image of product market competition on investment and financing maturity mismatch,and product market competition exacerbates investment and financing maturity mismatch by increasing the level of corporate surplus management,increasing the degree of financing constraints,and shortening the borrowing term structure.After testing the moderating effect,this paper finds that the exacerbating effect of product market competition on investment and financing maturity mismatch is suppressed with the increase of firm’s asset size and profitability level,and enhanced with the increase of growth.Finally,the results of this paper remain robust by using several econometric models.