The Effect of Internal Cash Flow on the Investment of Chinese Listed Companies
In order to test how financing factors influence the investment of Chinese listed companies, a theoretical and empirical analysis is conducted to prove the effects of internal cash flow on the corporate investment based on Chinese system background. The research shows that underinvestment will occur when free cash flow is low;otherwise, overinvestment will occur, under both circumstances, the corporate investment is sensitive to internal cash flow. As internal cash flow in non-state-holding enterprises is higher than that in state-holding enterprises on the average, and non-state-holding enterprises face more financing constraints, therefore, the investment is more sensitive to cash flow in non-state-holding enterprises than in state-holding enterprises. That provides evidence for perfecting investment and financing system and corporate governance mechanism to improve investment efficiency in Chinese listed companies.
Internal cash flow Underinvestment Overinvestment
Zhi Wang
School of Economics and Management, Changsha University of Science and Technology School of Economics and Trade, Hunan University Changsha, China
国际会议
北京
英文
836-840
2009-07-24（万方平台首次上网日期，不代表论文的发表时间）