scholarly journals Research of Microcosmic Affection Factors on Capital Misallocation: A Case of Chinese Listed Companies

2016 ◽  
Vol 2016 ◽  
pp. 1-12 ◽  
Author(s):  
Zhefan Piao ◽  
Jini Jia ◽  
Fangyan Shen ◽  
Rongda Chen
Keyword(s):  
Influencing Factors ◽  
Large Scale ◽  
Listed Companies ◽  
Bank Loans ◽  
Financing Constraints ◽  
External Financing ◽  
Equity Financing ◽  
Chinese Listed Companies ◽  
Capital Misallocation ◽  
Financial Liquidity

With the restrictions of equity financing of Chinese listed companies, debt dimensions are increasing, and the issue of corporate financial structure and financing constraints influence on capital misallocation has become an important practical problem which Chinese listed companies face. This paper is concerned with a model about capital misallocation and its influencing factors of integrated financing, capital operation, and investment performance. We take 7096 observations of 646 Chinese listed companies during fiscal years 2003 to 2014 for A-shares on the Shanghai and Shenzhen stock exchange, for instance, to empirically test the microscopic influencing factors of capital misallocation under different external financing dependence. The study illustrates the following: (1) in descriptive statistics of different industries capital misallocation, more than half of firms experience the circumstance of capital misallocation; (2) although Chinese listed companies are faced with financing constraints, capital market inefficiency, and other issues, most companies still depend on external financing; (3) the main factors that affect capital misallocation of the listed companies are financial liquidity and financial pledgeability; (4) the firms with high innovation abilities generally have stronger profitability, superior financial liquidity, and better financial pledgeability, thus reducing corporate capital misallocation; (5) the Chinese listed companies with large-scale assets and strong profitability easily obtain bank loans and equity financing, while violating the principle of assets matching.

The Study on Relationship between Financing Constraints and Investment-Cash Flow Sensitivity in Chinese Listed Companies

2011 ◽  
Vol 268-270 ◽  
pp. 1844-1849
Author(s):  
Chang Chun Li
Keyword(s):  
Cash Flow ◽  
Logistic Regression Model ◽  
Listed Companies ◽  
Financial Data ◽  
Financing Constraints ◽  
External Financing ◽  
Flow Sensitivity ◽  
Chinese Listed Companies ◽  
Cash Flow Sensitivity ◽  
The Relationship

This paper uses the financial data of all Chinese listed companies to construct two indexes that reflect the degree of external financing constraints faced by firms, using logistic regression model and multiple discriminate analyses respectively. Second, the author examines the relationship between financing constraints and the investment-cash flow sensitivity using OLS regressions. This paper provides evidence that the relationship between financing constraints and investment-cash flow sensitivity is monotonic, which is consistent with the findings of FHP(1988).

scholarly journals Which companies find it easier to obtain bank loans? Evidence from China

2013 ◽  
Vol 10 (3) ◽  
pp. 389-401 ◽  
Author(s):  
Wenjuan Ruan ◽  
Erwei Xiang
Keyword(s):  
Commercial Banks ◽  
Institutional Development ◽  
Listed Companies ◽  
Bank Loans ◽  
Foreign Banks ◽  
Bank Loan ◽  
Private Companies ◽  
Empirical Results ◽  
Chinese Listed Companies ◽  
Loan Financing

The study investigates the determinants of bank loan financing of Chinese listed companies from 1996 to 2009. The empirical results suggest that the channels through which companies obtain bank loans are different. Companies controlled by the state can more easily obtain loans from state-owned commercial banks and policy banks, while privately controlled companies have significantly larger access to loans from foreign banks. The empirical results also show that political connectedness and institutional development are the significant determinants of the bank loan financing of private companies. If companies locate in an area with higher level of institutional development, the proportion of their loans from state-owned banks is smaller than that of companies locate in areas with lower level of institutional development

scholarly journals Customer Concentration and Corporate Innovation: Effects of Financing Constraints and Managers’ Expectation of Chinese Listed Companies

2019 ◽  
Vol 11 (10) ◽  
pp. 2859 ◽  
Author(s):  
Bing Zhou ◽  
Yumeng Li ◽  
Shengzhong Huang ◽  
Sidai Guo ◽  
Bing Xue
Keyword(s):  
Fixed Effects ◽  
Threshold Model ◽  
Threshold Effect ◽  
Listed Companies ◽  
Financing Constraints ◽  
Innovation Capability ◽  
Corporate Innovation ◽  
Chinese Listed Companies ◽  
The Relationship ◽  
Double Threshold

Innovation capability of enterprises will greatly influence the current and future development of companies. This paper investigates the relationship between customer concentration and innovation capability of enterprises through the view of both the financing constraints and the expectation of managers. Based on the data of China’s A-share listed companies over the period from 2012 to 2016, several methods including system GMM, threshold model of fixed effects, and PSM are applied for empirical analysis. The results show that the innovation capability of listed companies in China are negatively correlated with the customer concentration. Higher customer concentration brings about stronger constraints from large customers on enterprises and greater dependence of enterprises on large customers, which result in weaker demand for innovation and lower investment in innovation. Meanwhile, the results demonstrate the double-threshold effect of financing constraints. The effect of customer concentration on innovation can be different in companies with low, medium, or high-financing constraints. Furthermore, optimistic expectations are more conducive to the reduction of customer concentration and the improvement of innovation. In addition, based on the perspective of the manager’s expectation, the research demonstrates the heterogeneous impact of manager’s expectation on the relationship between customer concentration and innovation capability.

scholarly journals The Impact of Employee Stock Ownership Plan on the Cost of Equity Capital: Evidence from China

2021 ◽  
Vol 2021 ◽  
pp. 1-17
Author(s):  
Fu Cheng ◽  
Shanshan Ji
Keyword(s):  
Listed Companies ◽  
Equity Capital ◽  
Stock Ownership ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Equity Financing ◽  
Employee Stock Ownership ◽  
Chinese Listed Companies ◽  
The Cost ◽  
The Impact

Due to the immaturity of bond market and the defects of internal governance structure, Chinese-listed companies have a strong preference for equity financing. How to reduce the cost of equity capital is particularly important for Chinese-listed companies. As an equity incentive system, employee stock ownership plan (ESOP) can reduce the agency conflicts among shareholders, executives, and employees to some extent. These reduced conflicts will, in an efficient capital market, be reflected in a lower cost of equity capital. This paper investigates whether the implementation of ESOP in a new era in China affects the cost of equity capital and further explores whether the impact of ESOP on the cost of equity capital is affected by the ownership nature, the firm size, and the contract design of ESOP. The results show that the implementation of ESOP reduces the cost of equity capital of enterprises. Compared with state-owned enterprises and large enterprises, the implementation of ESOP is more likely to reduce the cost of equity capital in non-state-owned enterprises and small enterprises. Furthermore, the reduction effect of ESOP on the cost of equity capital is influenced by the contract design of ESOP. This study not only enriches the literature on the relationship between employee stock ownership and the cost of equity capital but also provides a new idea for listed companies to reduce the cost of equity financing.

Can we-media information disclosure drive listed companies' innovation?—From the perspective of financing constraints

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hongbin Huang ◽  
Yani Sun ◽  
Qingling Chu
Keyword(s):  
Influencing Factors ◽  
Information Disclosure ◽  
Information Source ◽  
Listed Companies ◽  
Least Square ◽  
Financing Constraints ◽  
Content Type ◽  
Innovation Activities ◽  
Enterprise Innovation ◽  
The Government

PurposeThe purpose of this paper is to investigate to what extent the amount, information source and the content of the microblog information disclosure of listed companies could impact on innovation from the perspective of financing constraints.Design/methodology/approachThe propensity score matching (PSM) and two-stage least square (2SLS) are used in estimations to deal with the endogeneity problem.FindingsEvidence shows that the amount of we-media information disclosure significantly drives the innovation of enterprises. The mechanism is that we-media information disclosure drives the innovation by easing the financing constraints and bringing funds to the R&D activities. Further research shows that only the original information can drive the innovation. In particular, the R&D information promotes the R&D input and innovation output more significantly.Practical implicationsThe conclusion of this paper provides a reference for the listed companies to drive innovation with the help of we-media information disclosure, a new solution for the small and medium-sized listed companies in China which have difficulty in carrying out innovation activities due to financing constrains and also provides useful practical enlightenment for the government and the capital market regulatory authorities to issue relevant policies to regulate we-media information disclosure.Originality/valueThis paper introduces a new information disclosure channel--we-media into the research on influencing factors of innovation and discusses the influence of the amount, different sources and disclosure contents from we-media on enterprise innovation, which enriches the existing research on enterprise innovation influencing factors, providing a new perspective for driving enterprises to innovate.

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