Financial Constraints,Corporate Characteristics and Investment: Evidence from China Stock Market (1995—2006)

摘要

In this paper,we introduce the standard regression model and use Erickson and Whited's (2000) Generalized Method of Moments (GMM) estimation model to examine the possible influence of financial constraints and corporate characteristics on corporate investment based on china listed company sample from 1995 to 2006.Our empirical findings indicate that cash flow remains important for investment.We find that less-constrained firms exhibit larger cash flow sensitivities than more-constrained firms,which do not support the hypothesis for a positive relationship between the sensitivities and the degree of financial constraints.We also find evidence that young firms adjust investment by observing cash flow realizations.The corporate other characteristics,depreciation rate and volatility have no significant influence on the cash flow sensitivities of investment.