Research On The Impact Of Financing Constraints On Corporate Performance

The development of economic activities of enterprises is to pursue profits and achieve performance growth.It is essential to rely on external funds to support enterprises in carrying out revenue-generating business activities.When internal funds are insufficient to support the further development of enterprises,financing constraints will worsen the performance of enterprises.On the one hand,internal control has functions such as ensuring the quality of financial information and mitigating agency conflicts.On the other hand,analysts are the "information intermediary" in the financial market,and are an important subject of external governance forces.Enterprises’ behavior can also be affected by the external governance environment.This article comprehensively considers the impact mechanisms of internal control and analysts’ attention on financing constraints and corporate performance relationships from both internal and external perspectives.This article first reviews the existing literature and finds that there has not yet been a unified view on the relationship between financing constraints and corporate performance,and there is little research to investigate the role of other factors in the relationship,which needs to be further explored.Therefore,this article examines the impact of internal control and analyst attention on the relationship from both internal and external perspectives.Based on the above issues,this article takes domestic A-share listed companies in Shanghai and Shenzhen as the research object,and takes 2015-2020 as the observation period to investigate the relationship between financing constraints and corporate performance.Then,on this basis,it examines whether internal control and analyst attention play a regulatory role in the relationship between financing constraints and corporate performance.By connecting relevant theories such as information asymmetry,the research hypotheses of this article are derived,and corresponding empirical models are established for them.Relevant data are used to confirm the assumptions predicted in this article.The following conclusions are drawn: First,it is verified that financing constraints negatively affect enterprise performance,and financing constraints worsen its performance by restricting the development of economic activities that create economic benefits such as investment;Second,internal control weakens the negative impact of financing constraints on its performance.Internal control controls the quality of accounting information from within the enterprise,using a series of mechanisms of supervision and restraint to prevent the damage of agency issues to enterprise performance;Thirdly,analysts’ attention has also alleviated the negative marginal effect of financing constraints on their performance.Unlike ordinary investment groups,they are an important body of external governance forces in enterprises,with advantages such as professional skills and knowledge base to interpret enterprise information,acting as "information intermediaries" and playing a role of "external supervision";Based on further analysis of property rights,it was found that the performance of financing constraints on its performance,as well as the regulatory effects of internal controls and analysts’ attention,vary depending on the nature of property rights.This article expands the research on the influencing factors of enterprise performance,and also clarifies the internal logical relationship between internal control and analyst attention,respectively,and financing constraints and enterprise performance.It provides specific and feasible construction directions to reduce the adverse impact of financing constraints,with certain practical significance.Finally,based on the research conclusions of this article,targeted recommendations are proposed from the perspectives of reducing financing constraints,improving internal control,and standardizing the analyst industry.