The Impact of Debt Financing on Firm Investment Behavior: Evidence from China

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1 Inernaional Journal of Digial Conen Technology and is Applicaions Volume 4, Number 9, December 2010 The Impac of Deb Financing on Firm Invesmen Behavior: Evidence from China 1 Li Jiming, 2 Shi Chengqin, 3 Wang ZhaoHua 1, Firs Auhor Zhejiang Universiy Ciy College, *2,Corresponding Auhor Zhejiang Universiy Ciy College, 3 Zhejiang Universiy Ciy College, doi: /jdca.vol4. issue9.3 Absrac This sudy examines he impacs of deb financing on he firms invesmen decisions by employing he mehod of he muliple linear regression on he daa from of 60 Chinese real esae lised companies. We obain hree major findings. Firs, here is a negaive relaion beween deb financing and invesmen behavior in boh firms wih low-growh opporuniies and high-growh opporuniies and ha his negaive effec is significanly sronger for firms wih low-growh opporuniies han hose wih high-growh opporuniies. Second, here is a posiive relaion beween deb financing and invesmen behavior in firms wih mid growh opporuniies and operaing performance. Third, for he sae-owned holding companies, here is a posiive relaion beween he scale of invesmen and deb financing; while a negaive relaion beween invesmen and deb financing exiss in non-sae-owned holding companies. The resuls provide suppor o agency heories of corporae leverage, and especially he heory ha leverage has a disciplining role for firms wih low-growh opporuniies. Keywords: Deb Financing, Invesmen Behavior, Over-invesmen, Underinvesmen 1. Inroducion A significan bu conroversial issue in finance is he impac ha deb financing has on a firm's invesmen decisions. In a fricionless and complee markes world, Modigliani and Miller (1958) demonsrae ha leverage is irrelevan o a firm's invesmen choices and o he firm s value. However, in a world where here are incomplee markes and significan agency coss, leverage may have a varied and complex impac on invesmen. In recen years empirical sudies have been underaken o examine he relevance of he deb financing and capial invesmen heories. Lang e al. (1996), Aivazian e al. (2005a), and Ahn e al. (2006) all repor a negaive relaion beween invesmen and deb financing alhough he correlaion is much sronger for firms wih low-growh. This evidence is consisen wih he overinvesmen sory (Sulz, 1990) where leverage inhibis managers of low-growh firms from invesing in non-profiable capial expendiures. These sudies use daa from he U.S. and Canada where long-erm deb financing is provided by profi maximizing banks and public bond markes. Here, he deb-holders monior and discipline he firms hey lend o. However, he resuls from hese sudies do no necessarily generalize o ransiional economies such as where he relaions beween lenders and borrowers are more complex. Transiional economies are characerized as having nascen sock markes, an absence of public deb markes (or, a mos, embryonic public deb markes), and a reliance on bank borrowing. The purpose of his sudy is o invesigae he relaions among deb financing, invesmen behavior, company growh, and performance for China's lised firms. We use daa from 2006 o The opening up of China s economy and he adopion of free marke principles has presened many invesmen opporuniies for is lised firms. The average annual ne invesmen by firms exceeds 34% of oal asses in place a he beginning of he year and which helps accoun for China's saggering economic growh rae in he pas 20 years. Our sudy conribues o he several srands of researches ha make up he invesmen and deb financing debae. Mos empirical sudies have used daa from he U.S. and oher developed counries ha have a privae, or quasi-privae, banking secor. Using daa from China allows us o analyze he invesmen and deb financing relaion in a sae-conrolled banking environmen ha differs quie

2 The Impac of Deb Financing on Firm Invesmen Behavior: Evidence from China Li Jiming, Shi Chengqin,Wang ZhaoHua markedly from hose in developed counries. Our resuls provide boh suppors for and agains he findings from prior researches. 2. Relaed lieraure Researches on he impac on invesmen from conflics beween shareholders and he credior dae from 1970s. In a seminal paper, Myers (1977) analyzes possible exernaliies generaed by deb on shareholders (and managemen s) opimal invesmen sraegy. The idea is ha deb overhang reduces he incenives of he shareholder manager coaliion in conrol of he firm o inves in posiive nepresen-value invesmen opporuniies, since he benefis accrue, a leas parially, o he bondholders raher han fully o he shareholders. A he very beginning, some researchers see his conflics make lile implicaion on invesmen, while, Jensen & Meeking(1976), and Myers(1977) sugges ha he conflic beween shareholders and crediors can induce inadequae invesmen and asse subsiuion. Furher, Gavish and Kalay (1983) find, he asse subsiuion can be serious wih he increase of deb. Berkovich and Kim (1990) show how he financing conrac brings impacs on he excessive invesmen. Parrino and Weisbch(1999) find here does exis conflic beween shareholders and credior, and his conflic can go seriously wih he increase of deb. Excep he conflic beween shareholder and crediors, he conflic beween shareholders and managers also exiss. Berle and Means (1932) do he sysemaic research on his. Jensen (1986) poins ou deb can preven he excessive invesmen. These wo conflics caused by deb financing may joinly exis in any company, bu under differen circumsances one conflic may demonsrae more inense han he oher. In order o furher explain he impac of deb on differen companies, we always divide he companies ino high-growh companies and low-growh companies. Lang e al.(1996), based on he daa of indusrial companies in he Unied Saes from , ge ha he negaive relaionship beween invesmen and leverage only exis in low-growh company, while i does no exis in high-growh company. Aivazian (2005) find no maer whaever he growh is high or low, deb always has negaive effecs on invesmen. The negaive effec on he low-growh company is sronger. There are suppors for boh he overinvesmen and he underinvesmen heories in he exan empirical lieraure. McConnell and Servaes (1995) examine a large sample of non-financial US firms for he years of 1976, 1986, and Recenly, Ahn e al. (2006) documen ha he negaive relaion beween leverage and invesmen in diversified firms is significanly sronger for high Q segmens han for low Q business segmens, and is significanly sronger for non-core segmens han for core segmens. Among low-growh firms, he posiive relaion beween leverage and firm value is significanly weaker in diversified firms han in focused firms. Their resuls sugges ha he disciplinary benefis of deb are parially offse by he addiional managerial discreion in allocaing deb service o differen business segmens wihin a diversified organizaional srucure. The differences in exising empirical resuls for high Q and low Q companies may be due o Q serving as a proxy for ease of access o he capial marke. High Q firms (hose wih srong growh prospec) have expecaions of higher cash flows, or ne value, and his may reduce moral hazard and adverse selecion problems inheren in he supply of credi o he firm in he capial marke. For firms wih low Q, leverage would be a igher consrain limiing invesmen, since such firms would find i harder o recapialize given heir perceived weak growh prospecs. However, his argumen does no explain he posiive relaion beween leverage and firm value for low Q firms. 3. Hypohesis There are hree impacs of deb on invesmens: asse subsiuion, inadequae invesmen, excessive invesmen deducion. Under he firs impac, here is a posiive correlaion beween deb and invesmen; under he oher wo, here is a negaive correlaion beween deb and invesmen. Under differen marke siuaion, differen empirical resuls are obained. The impac mechanism can be differen, hence, he hypoheses we made should be boned in Chinese capial marke. Since here are conflics among shareholder, manager, and credior, he relaionship beween deb and invesmen is mosly significanly negaive, bu as o he growh of he differen companies, he

3 Inernaional Journal of Digial Conen Technology and is Applicaions Volume 4, Number 9, December 2010 mechanism is differen. As o low and mid-growh companies, on he one hand, lacking of he good invesmen opporuniy, low risk of he invesmen projec and he budge of he bank reduce he invesmen subjeciviy caused by he conflics beween shareholder and credior. On he oher hand, deb can deduce he excessive invesmen caused by he conflics beween shareholder and manager. Hence, he higher proporion he deb in low or mid-growh companies, he lower he invesmen. As o he high-growh company, due o more invesmen opporuniies, and he higher risk of he projecs, he increasing proporion of deb may srenghen he asse subsiuion caused by conflics beween shareholder and credior, which can increase he invesmen. Bu on he oher hand, someimes he higher risk of he projec or asymmeric informaion can cause objecive invesmen insussficiency, and deb can weaken he excessive invesmen caused by shareholder and manager, which reduces he invesmen. Hence, wih he increasing of deb, he reducion of deb in he high-growh company is less han ha in he low-growh company. Moreover, here is a posiive relaionship beween deb and invesmen. H1: in he low-growh (or mid-growh) company, here is a significan negaive relaionship beween deb and invesmen. H2: in he high-growh company, here is a significan relaionship beween deb and invesmen (posiive or negaive correlaion) H3: he correlaion coefficien beween deb and invesmen in he high-growh company is less han ha of he low-growh company. Due o he unclear principal-agen relaionship in sae-owned companies, on he one hand, managers in sae-owned companies do no need o underake he risk of failure of invesmen, hey easily go ino excessive invesmen, furhermore, wih he increasing deb, he probabiliy of bankrupcy will increase, which doesn hrea he career of managers. Hence, he high deb of saeowned companies has lile influence on excessive invesmen reducion. On he oher hand, he unclear principal-agen relaionship srenghen he conflics beween shareholder-credior, wih he higher he proporion of deb, he sronger moivaion of asse subsiuion, because he bad deb from bank loans will be underaken by counry, and as he policy suppor from he counry, hese sae-owned company can sill ge refinancing (Ping Xinqiao, 1998), he shor of objecive invesmen will decrease. These wo siuaions in sae-owned companies will weaken he negaive relaionship beween deb and invesmen. Recenly, wih he reform of sae-owned Banks, solve he problem of non-radable shares of lised companies and he perfec governance srucure of sae-owned company, invesmen of saeowned company will have very big change, bu inheren pah dependence will no disappear. H4:In sae-owned company, here is a significan posiive relaionship beween he proporion of deb and invesmen, and here would be excessive invesmen. In non-sae-owned company, here is a significan negaive relaionship beween he proporion of deb and invesmen. 4. Mehodology 4.1. Model There are many facors influencing company invesmen. Based on he Tobin Q model, and a furher modificaion on he research of Lang, Ofek&SulZ(1996), Aivazian(2005), Tongpan(2005), Lishennan & Niujianbo (2005), we ake consideraion of he acual siuaion of lised companies in China. In our model, he cash flow (CF i ), value of company (Tobin Q), income from sales (S )are conrol variables. In order o examine he impac of deb on invesmen, we use OLS o inspec he relaionship beween invesmen and explanaion variables. I K 1 DB 1 S 5 K 1 1 I 2 K 6TQ i ROE LNSIZE 7 3 CF 4 K Y H i i

4 The Impac of Deb Financing on Firm Invesmen Behavior: Evidence from China Li Jiming, Shi Chengqin,Wang ZhaoHua Where I /K -1 indicaes invesmen scale, DB -1 is asse-liabiliy raio in ime -1, (I /K -1 ) -1 is invesmen in ime -1, ROE is ne asses yield, CF / K -1 is cash flow from business aciviies, S / K -1 is ne sales, TQ -1 is Tobin Q in ime -1, LNSIZE is he log value of oal asse, Y is he ime fixed effec, H company fixed effec, ε is error erm, I is company I, indicaes ime Variables Dependen variables We use invesmen as he dependen variable, he raio of invesmen spending o capial accumulaion (I / K -1 ) as a measure of corporae invesmen scale, which can eliminae he impac of he enerprise scale on invesmen. Invesmen I is refleced by -year s fixed asses, long-erm invesmens, and he consrucion in progress. Capial accumulaion K -1 is he oal asse of previous year (year -1 ), which is also he oal asse a he beginning of his year Independen variables We use he asse-liabiliy raio in year -1 as he independen variable, which is he raio of oal liabiliies o oal asses in year -1. The asse-liabiliy raio in year -1 has more explanaion power on firm han ha of year, because he disribuion of ineress beween shareholders and crediors is based on he iniial financing srucure Conrol variables Alhough his paper is focuses on he impacs of deb financing on invesmen, here are many oher facors conribuing o he invesmen aciviy, according o he heory of corporae invesmen. Hence, we follow he classic Q model, adding he imporan facors as he conrol variables: cash flow (CF i ), he enerprise value (Tobin Q value), he sales revenue (S ), invesmen level in year -1(I,-1 /K -2 ), ne asses yield (ROE ), he company size (LNSIZE i ), he ime fixed effec (Y ), and he corporae fixed effecs (H i ). I /K -1 DB -1 (I /K -1) -1 Variable Invesmen scale Toal asse-liabiliy raion Invesmen scale in year -1 Table 1. Variables Definiion (fixed asses, long-erm invesmens, and he annually change in consrucion in progress, depreciaion)/ oal asse in year -1 Toal liabiliy/oal asse in year -1 Year -1(fixed asses, long-erm invesmens, and he annually change in consrucion in progress,depreciaion ) /oal asse in year -2 ROE ne asses yield Revenue before ax/ne asse CF Cash flow Cash flow before ineres expenses Q -1 Tobin Q Year -1(liabiliy+sock price*number of radable share+ne asse per share*number of non-radable share)/asse ( book value) S / K -1 Prime operaing revenue raio Prime operaing revenue /oal asse in year -1 LNSIZE i The scale of enerprise Log value of oal asse of year (book value) Y Time fixed effec Time dummy variable,1 or 0 H i Corporae fixed effec Indusry dummy variable, 1or Daa

5 Inernaional Journal of Digial Conen Technology and is Applicaions Volume 4, Number 9, December 2010 In his paper, financial daa of real esae companies from 2006 o 2008 are employed. There are hree reasons for he research focus on real esae companies. Firsly, invesmen behavior varies in differen indusries. We need o focus on one indusry. Secondly, Real Esae Company invess mosly in fixed asses, hey have long recycling cycle, irreversible characerisics of invesmen, which can reflec he characerisics of real invesmen. Thirdly, he real esae company occupies a high posiion in China s naional economy. Fourhly, many real esae companies are sae-owned, which can well reflec he invesmen aciviy of sae-owned company. This paper invesigaes all 105 lised real esae companies in Shanghai sock marke. In order o avoid he abnormal values and marke uncerainy influencing he company invesmen, we drop ou ST (3-year successive loss), he companies which did no disclose annual repors by April and hose showing abnormal financial daa. Finally we chose 60 lised real esae companies focusing on daa from 2006 o The daa are colleced from he following wo websies: hp://www.cninfo.com.cn/defaul.hm, hp://www.cnsock.com. 5. Empirical resuls 5.1. Group on firm s growh opporuniies Firsly, we rearrange he companies by he firs hree years average Tobin Q value, spli he whole group ino hree subgroups: he high, middle and low-growh company according o he growh of company. The saisics descripion is presened in Table 2, shown from which, and compared wih low-growh or mid-growh companies, high-growh companies have he higher invesmen level. We noice ha, since he real esae indusry is a high deb indusry, he average deb in high-growh company is a leas 0.373, he average deb in low-growh company is a mos 0.721, which is similar as Lehn and Racic(2002) who found ha here is a negaive relaionship beween deb and growh opporuniy. Highgrowh Midgrowh Lowgrowh Table 2. Saisics descripion of group on he growh opporuniies Varibale Mean Median S. d I/K DB CF Q ROE S/K LNSIZE I/K DB CF Q ROE S/K LNSIZE I/K DB CF Q ROE S/K LNSIZE This deb srucure is good for he developmen of all companies, because according o he agen heory of deb, high deb is good for excessive invesmen reducion in he low-growh company, while

6 The Impac of Deb Financing on Firm Invesmen Behavior: Evidence from China Li Jiming, Shi Chengqin,Wang ZhaoHua low deb is good for releasing he conflics beween shareholder and manager in high-growh companies. The resuls also reveal ha, compared wih low or mid companies, high-growh companies have he higher Tobin Q, heir cash flow and sales are lower. The saisics abou asse-liabiliy raio inerval of differen growh companies are presened in able3. Table 3 shows ha no maer wha growh he company is, here is negaive relaionship beween invesmen and deb, and in anoher hand under he lower asse-liabiliy raio (20%-40%), he invesmen in median growh company is larger han ha in he high-growh company. However, under he level of 40% o 60%, invesmen is lower in mid-growh company han in high-growh company, ha is o say, he deb in mid-growh company has a significan posiive effec. Meanwhile, from he sandard deviaion (S.d)of hese wo ypes of companies, we find S.d in high-growh company is , S.d in mid-growh company is , S.d in low-growh company is I means he invesmen decreases faser in mid-growh company wih he increasing of asse-liabiliy raio. I/K-1 High-growh mid-growh low-growh Table 3. Invesmen scale in differen asse liabiliy raio inerval DB oal (%) mean / / / median / / / S.d / / / sample Group Mean / / Median / / S.d / / sample Group Mean / / / median / / / S.d / / / sample Group OLS resuls Wih he help of SPSS16.0, we conduc muli-variable regression of hree differen growh ype companies. Shown from Table 4, we can see he coefficiens and he significances are differen, which reveals ha he relaionship beween deb and invesmen in differen ypes of company differs. As o he high-growh company, he coefficien is , which is significan under he 95% confidence. In low-growh companies, he coefficien is Tha is o say, in ime -1, if he asse-liabiliy raio increases by 1%, here will be more 0.062% invesmen reducion in low-growh companies han in high-growh companies. Wih he increase of deb, he invesmen will decrease no only in highgrowh companies bu also in low-growh companies. However, he invesmen decrease will be less in high-growh companies han in low-growh companies. The resuls verify he H1 and H2 he negaive relaionship beween deb and invesmen in high-growh companies. They revel ha he effec of deb reduces he excessive invesmen caused by he conflics beween shareholder and credior. Due o he fac ha he higher he growh of he company, he more he invesmen is, if here is a good invesmen opporuniy, he negaive relaionship beween deb and invesmen can consrain normal invesmen aciviy, causing invesmen insufficiency. Deb effec on he invesmen in highgrowh companies is differen from ha in low-growh companies, which verifies H3. Our regression resuls also show ha here is a posiive relaionship beween invesmen and ne asse yield, cash flow, Tobin Q, prime operaing revenue raio, and enerprise scale. These facors promoe he invesmen of company. From Table 4 we can see he coefficien before DB, is 0.116, which is significan under 90%. Tha is o say, deb promoes invesmen, which is differen from H1. The reason is mid-growh companies

7 Inernaional Journal of Digial Conen Technology and is Applicaions Volume 4, Number 9, December 2010 have good risk managemen and hey can easily ge finance suppor from ouside, hence, deb conribues largely o he growh of hem. Table 4. OLS resuls of he high, mid and low growh company Dependen variables:(i /K -1) Variable model1 model2 model3 (high-growh) (mid-growh) (low-growh) (Consan) / / / DB ** 0.116* *** (0.0432) (0.0844) (0.0032) I -1 /K * (0.0723) (0.6243) (0.9961) CF /K ** 0.098* 0.092* (0.0243) (0.0762) (0.0828) ROE 0.021** 0.021** 0.042*** (0.0239) (0.0382) (0.0063) TQ *** 0.087** 0.212*** (0.0042) (0.0364) (0.0014) S /K (0.2416) (0.8125) (0.4823) LNSIZE (0.2494) (0.3891) (0.3472) Y,H i conrol conrol conrol R adj R F N Noe:***,**,* significan under he 99%,95%,90% confidence inerval respecively, p-value in parenheses 5.3. Group on he shareholder srucure We conduc he regression on wo ypes of companies: sae-owned company and non-sae-owned company. According o H4, we divide he sae-owned company and non-sae-owned company based on wheher he proporion of sae-owned shares is larger han 50% or no. From Table 5, we have he following findings: Firsly, he asse-liabiliy raio of sae-owned company is , larger han ha of non-saeowned company s I implies ha he consrain on finance of sae-owned company is loose, hey ge financial suppor from bank easily. Secondly, by comparing he sandard deviaion of average invesmen of wo ypes of companies, we find he S.d of sae-owned company is and he S.d of non-sae owned company is I revels ha, compared wih non-sae owned company, sae-owned company s invesmen has a feaure of high level and low volailiy. Thirdly, he Tobin Q in non-sae owned company is higher han ha of sae-owned company, which reveals he higher efficiency of invesmen and he faser developmen of he non-sae owned company. Table 6 shows some saisics of invesmen on he inerval of asse-liabiliy. The scale of invesmen of sae-owned company goes up firs and hen goes down wih he increasing of deb. The scale of he invesmen reaches he maximum in he deb inerval from 0.4 o 0.6, which reveals here is an asse subsiuion endency under he high deb siuaion. We also find ha he invesmen of non-sae owned company decreases wih he increase of deb, ha is o say, deb has more consrain on he invesmen of he non-sae owned company

8 The Impac of Deb Financing on Firm Invesmen Behavior: Evidence from China Li Jiming, Shi Chengqin,Wang ZhaoHua Saeowned Non-sae owned Table5. Saisics of groups on he shareholder srucure I/K-1 DB-1 CF/K-1 TQ-1 ROE S/K-1 LNSIZE mean median S.d mean median S.d Table 6. Invesmen scale in differen asse liabiliy inerval I/K-1 DB-1(%) TOTAL Saeowned Non- Sae owned mean / median / S.d / N mean / median / S.d / N Regression resuls Table 7. OLS resuls of group on shareholder srucure Dependen variables:(i/k-1) Variable mode11 model2 (sae-owned) (non sae-owned) (Consan) N/A N/A DB * *** (0.0632) (0.005) I-1/K (0.6731) (0.2375) CF/K ** 0.064*** (0.0266) (0.0031) ROE 0.232*** 0.112** (0.0082) (0.0378) TQ *** 0.233* (0.0034) (0.0615) S/K ** 0.065*** (0.0361) (0.0081) LNSIZE 0.093** 0.039* (0.0491) (0.0837) Y,Hi Conrol Conrol R Adj-R F N ***,**,* correspond o p-values of 1%, 5%, and 10%, respecively. As shown from Table 7, he coefficiency of DB of sae-owned company is larger han 0, which verifies H4. The excessive invesmen is seriously caused by he conflics beween shareholder and credior in sae-owned company. The reasons maybe: Firsly, mos of he deb comes from sae-owned banks due o he homology of he sae-owned company and bank. So i induces he asse subsiuion and ignorance of bankrupcy of managers and srenghen he posiive correlaion of deb and invesmen

9 Inernaional Journal of Digial Conen Technology and is Applicaions Volume 4, Number 9, December 2010 Secondly, he lack of corporae governance consrains he sae-owned company. The lower efficiency of corporae governance, he more excessive invesmen managers are prone o. Bu from he regression resul, we find he coefficien of DB is significan only fewer han 90%, parly because of he reform of sae-owned company and he subsequen perfecion of he corporae governance. As o non sae-owned company, he coefficien of DB is significanly negaive, ha is o say, consrain of deb on invesmen is srong. The reason is ha cooperae propery clearance induces a normalized relaionship beween company and bank. Hence, deb can pu consrains on invesmen, preven he excessive invesmen. Mean while, i is more difficul for he non sae-owned company o ge financial suppor. The resul of he regression suppors he H4. in his heading, hey should be Times New Roman 11-poin boldface, iniially capialized, flush lef, wih one blank line before, and one afer. 6. Conclusion This paper invesigaes he relaionship beween deb financing and corporae invesmens based on various grouping of companies, which are classified based on he growh of a company and is shareholder srucure. We employ muli-regressions mehod and ge he following resuls: We firsly divide our sample companies ino low-growh, mid-growh and high-growh caegories. We find here is a significan negaive relaionship beween deb financing and invesmen behavior in high-growh and low-growh companies and he negaive relaionship is sronger in low-growh companies. There is a significan posiive relaionship in mid-growh company. As o low-growh companies, he higher level of deb will force hem o give up invesmen. Meanwhile, deb can resric he excessive invesmen in non-profi programs. Hence, i proecs he ineres of shareholders, which srenghen he negaive correlaion beween deb financing and invesmen behavior. As o he highgrowh company, higher level of deb can induce he impulse in asse subsiuion. They inves in high risk projecs in seek of high profis, hough here exiss risk of bankrupcy, which can resric he invesmen behavior o some exen. As o he mid-growh companies, because hey have sound risk managemen and are good a capuring invesmen opporuniy, hey can ge exernal financing easily. So deb financing promoes heir invesmen behavior. In erms of shareholder srucure, invesmen behavior of China s companies is also influenced by deb financing. However, grea difference lies beween sae-owned company and non-sae-owned company. Our research reveals here is a posiive relaionship beween deb financing and invesmen behavior in sae-owned company, while here is a negaive relaionship beween deb financing and invesmen in non-sae-owned company. Finally, we discuss oher facors ha influence he invesmen behavior of a company. These Facors mainly include he ne asse yield, he cash flow and he Tobin Q.All of hem play a posiive role in a company s invesmen. The higher he ne asse yield and he more he cash flow, he more he company ends o expand. The higher he Tobin Q of a company, he easier for i o ge financing, he more possible for i o make fuure invesmens.. 7. References [1] Lu ZhengFe DongPan, Deb Financing on Enerprises Invesmen Behavior: Review, Accouning Research, vol , pp [2] Yang Xuela The Reason For Lised Companies Changed he Raise Funds In Differen, Journal of Wuhan Insiue of Indusrial, vol , pp [3] CuiLi and Zhong ChangJun, On Enerprises Invesmen Behavior of Deb, Journal of Economic Theory Research, vol , pp [4] Ross, Compensaion, he Dualiy of Incenives and Risk Aversion Riskiness, Journal of Finance, 2004, (59), pp [5] Liudan, Growh Opporuniies And Capial Srucure In Biological Pharmaceuical Indusry: The Lised Company's Empirical Sudy, Securiies Marke Herald, 2005 (3), pp [6] Dongpan, Lu ZhengFe Deb Financing And Enerprise Invesmen, From The Experience Of China's Lised Companies, Journal of Economic Research, 2005 vol 5, pp

10 The Impac of Deb Financing on Firm Invesmen Behavior: Evidence from China Li Jiming, Shi Chengqin,Wang ZhaoHua [7] Dongpan, Term Srucure of Deb and Corporae Invesmen Liabiliies Scale: From China Shares Of The Lised Company, Science, 2005 vol.5, pp [8] Wu Lina, Lu ZhengFe Invesmen and Financing Behavior Based on The Experimenal Sudy, Journal of Managemen World, 2005 vol.4, pp [9] Li ShengNan, NiuJianBo,. The Relaionship Beween Deb Level of Lised Company and Invesmen Spending, Journal of Securiies Marke, 2005, pp [10] Chen JianBo, YuQiao, Invesmen Behavior Research, hp://old.cene.ccer.edu.cn/wenxian/, 2001 [11] Anoniou a. Gnney, y. k., The Deerminans of Paudyal Corporae Deb Mauriy Benefi, Durham, UK: Working idea of Durham, [12] Lang, L.E, Ofek, E., Sulz, R. Leverage, Invesmen and Firm Growh, Journal of Financial Economics, 1996 (40), pp [13] Varouj A. Aivazian, The Impac Of Leverage On Firm Invesmen: Canadian Evidence, Journal of Corporae Finance, 2005, pp [14] [GuoBin, Deb Financing Opions, Souhwesern Universiy Of Finance and Economics, [15] Li BingXiang, The Financial Crisis Company Invesmen Behavior, Managemen, 2003, pp [16] Fei Fangyu, Conrol The Insider Conrol: The Sae-Owned Enerprise Reform Governance Mechanism Sudy, Journal of Economic Research, 1996, pp [17] Ping xinqiao, Sof Budge Consrain, Journal of Economic Research, 1998, pp [18] HuNan, Real GDP growh, hp://house.hexun.com/ / hml , /. [19] Yu Shengao, Real Esae Indusry Is Naional Economy Imporan Indusries, hp://weihai..house.sina.com.cn/ news/ / hml, [20] Goyal, Vidhan K, Kenneh Lehn, Rocic Sanko, Growh Opporuniies and Corporae Deb Policy, Journal of Financial Economics, 2002,pp [21] Luo GongMing, Deb Financing and Invesmen. Scale Research, Journal of Guangdong, Jinan Universiy, [22] Gu NaiKang and Yang ao, The Shareholding Srucure of Capial Srucure of Empirical Sudy, Journal of Sun Ya-Sen Universiy (social science ediion), 2004,pp [23] HeYuan, Sue xianbin, Yangpin, Deb Financing on Business Invesmen Behavior, Modernizaion, 2006, pp [24] HanDeZong and Xiang ka The Lised Companies in China Deb Financing Srucure, Science, 1999, pp [25] He JinGeng, Ding JiaHua, Lised Company Invesmen Decision-Making Behavior, Journal of Securiies Marke Herald, 2001, pp

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