Based on product market competition on enterprise investment and debt Relations Review

[Abstract] corporate investment and financing as the two basic financial activities closely linked with, and the theory of industrial organization of investment and financing decisions for the enterprise provides a complete, operational analytical framework of the article review and comment on the modern system of financial academic literature on the relationship between investment spending and debt levels of the main findings, combined with the scholars on product market competition and corporate decision-making between microscopic findings, think about the direction of further Research in this field, that the product is in the perspective of market competition, corporate investment and financing relationship, which enrich our relationship microscopic study of corporate investment and financing of positive significance.

[Keywords] product market competition, investment expenditures, debt levels

I. Introduction

The efficiency of corporate capital campaign, that corporate investment, financing, capital efficiency performance of the enterprise the ability to configure its decision in the market competition in the state and development prospects of survival, but a long time, both in theory and in real economic activity Both have been in some degree of fragmentation and non-equilibrium state of development. Modigliani and Miller (1958's "MM theorem" that, in the absence of friction costs, capital markets, perfect and effective in the case, and financing corporate investment behavior not relevant because of the perfect market assumptions do not exist in reality, with further Research, Western scholars began to explore relaxation of various assumptions corporate investment and financing relationships. ① from the perspective of value creation, investment decisions are Among the company's three most important financial decision making ②, it's development has a decisive significance, while in practice and academia, for which factors most affect the company's investment decisions has not yet consensus in the 20th century 1960s and 1970s, Western scholars began to stand in the perspective of market Research firm's investment behavior, then the field has a large number of scholars from different angles to continue Research (Lucas and Prescott, 1971, Spence, 1979, Lippman and Rumelt, 1985 , Caballero, 1991, Kiyohiko G Nishimurg, 1991, Donald A. Hay and Guy S. Liu, 1998, Laarni T Bulan, 2005, etc.) on the specific relationship between the mechanism and impact due to the selected sample, Research methods and other factors, despite the conclusions of the study of foreign scholars are not consistent, but their findings have revealed the product market conditions will affect the micro-decisions (including investment decisions.

Review based on the focus of this article, the author is not prepared to involve the relationship between investment and financing all the documents to be reviewed, but only by levels of business investment spending and debt to sort out the relationship between literature and summarized, with scholars on product market competition and micro-enterprise the relationship between the main decision-making research from the perspective of product market competition to explore the relationship between corporate investment and financing further research.


Second, the literature review

(A) the relationship between debt financing and investment behavior of
Western scholars and liabilities for enterprises to invest in the relationship between research findings can be broadly grouped into three categories (children hope, Lu Zheng-fei, 2005: The first, of the shareholders - the creditor conflict and the relationship between corporate investment behavior, the second to study the governance role of debt camera Thirdly, debt maturity structure of investment behavior ③.

On shareholders - the creditor conflict on corporate investment behavior, Jensen and Meckling (1976 considered when making investment decisions, shareholder / manager of alternative assets may be carried out according to their point of view, if the company's financing structure in which a larger ratio of liabilities, which will induce shareholders / managers to take the plunge that had little chance of success if success is extremely high return investment projects, if successful investment risk, the shareholders / managers can earn more than the book value of liabilities, most of the benefits, if the investment fails, shareholders only by the limited liability constraint, the creditor will bear the brunt of the failure of the loss, rational creditors when the loan is expected to be the correct behavior of the shareholders investment in the future, requiring a higher rate of return, which led to the debt first kinds of agency costs that asset substitution problem. Myers (1977, analyzes the shareholders - corporate investment behavior of creditors impact of conflict on another aspect: lack of investment, he analyzed the liability of the impact of growth companies, in particular, when the company's liabilities ratio increases, the company also will increase the probability of bankruptcy at this time, the shareholders / managers of the project NPV is positive there is a lack of motivation to invest in other words, although some investment projects in line with the goal of maximizing corporate value, but As part of its creditors, most of the expected return, in which case, even though the NPV of these investment projects is positive, shareholders / managers will not invest in them when the rational creditors before the loan is expected to this situation, companies have to pay higher debt financing costs, which led to another debt agency costs that the problem of insufficient investment in Jensen and Meckling (1976, Myers (1977, after the pioneering study, Smith and Warner (l979 study indicated that In the corporate bond issuance risk, shareholder / managers have an incentive to make beneficial shareholders against the interests of creditors of the operating and financial decisions. Subsequently, a number of scholars from the level of indebtedness (Gavish and Kalay, 1983, the financial contract (Berkovitch and Kim, 1990 , growth (Ahn, Seoungpil, et al., 2006 point of view of shareholders - the corporate creditors, investment behavior of conflict-induced distortions to start the study.

Look at the situation of domestic scholars. Domestic scholars have begun to study the existing investment and finance companies considered together, but on shareholders - the investment behavior of creditors impact of conflict on the research is still relatively small, especially the lack of empirical systems in the field study children hope, support Xiaoqiang (2005 Monte Carlo simulations using empirical shareholders of listed companies in China - a conflict of interest for creditors, corporate investment behavior and its influencing factors, Jiang Wei, Shen Yi-feng (2005 debt agency costs from the perspective reveals China's companies in the market for asset substitution behavior and its stake was down between the "N" type of non-linear relationship, and the company will increase investment opportunities in alternative assets of shareholder influence behavior. Xing, Yang Yimin (2006 results of empirical studies show that financial structure and business investment in general showed a significant negative correlation, but if the study sample according to the growth of the division, then the low-growth business financial structure and investment spending and did not show a significant negative correlation. their findings in line with debt agency cost theory, strong support for the debt financing for high growth companies will have less impact on investment argument.

The camera in the governance role of debt on corporate investment behavior effects, Jensen (1986 pointed out that, due to have an incentive to expand the size of the business, managers will be at the expense of the shareholders at the expense, the use of idle funds for those who can expand the scale of non-profit project investment, which led to over-investment manager behavior, according to Jensen's point of view, this balance can inhibit the over-investment manager behavior, between shareholders and managers to reduce agency costs and liabilities in order to play the role of the camera control. Specifically, liabilities camera to play the role of governance based on two reasons, first, the characteristics of debt service liabilities on a regular basis helps to reduce the company's idle funds, to prevent the use of too much idle funds managers to make their own benefit but in the interests of shareholders against over-investment behavior, and the second, liabilities will increase monitoring and managers face the risk of bankruptcy, because bankruptcy caused by fear of losing control over the transfer from a variety of business interests, companies with low debt compared with high debt business manager is more difficult to make the above self-interest but the interests of shareholders against investment decisions. Subsequently, a number of scholars (John and Senbet, 1988, HEinkel and Zechner, 1990, Hart and Moore, 1995, Lang et al., 1996, Childs , PD, et al., 2005, etc.) from different angles of studies have confirmed that debt financing plays a role in the camera control.

For liabilities, the camera control function, domestic scholars study found that business growth (Jiang Wei, Shen Yi-feng, 2004, investment risk (children hope, Lu Zheng-fei, 2005, the ultimate controller of nature (Li Shengnan, cattle Jianbo, 2005; Xin springs, Lin Bin, 2006; Liqiao Li, 2007, etc., controlling shareholder equity ratio (Yao Mingan, Kong Ying, 2008) and other factors will affect our corporate governance role of debt camera to play, but overall, the domestic scholars to get the test results Western theory and the aforementioned expectations are quite different.

(Two product market competition and corporate investment behavior Relations Links to free download http://www.hi138.com Western scholars as early as the 1960s and 1970s on the product market competition and corporate investment behavior of a study of the relationship such as Frederic and Scherer (1969 in the "Market structure and stability of investment" in the article discusses the market structure and investment relationship between the stability of its research found that when industry concentration is relatively high, business investment will be more significantly deviate from its target value, when industry concentration is low and large scale industry, this deviation will very likely be random.

Subsequently, the area has a large number of scholars from various angles in-depth research in industry conditions and the relationship between corporate investment behavior, many foreign scholars (Lucas and Prescott, 1971, Spence, 1979, Gilbert and Harris, 1984, Kiyohiko G Nishimurg , 1991; Donald A. Hay and Guy S. Liu, 1998, William T. Charlton and Carol Lancaster, 2002, etc. are explored. In addition, some scholars have revealed the extent of competition in the industry will affect the timing of investment (Han TJSmit and LA.Ankum, 1993, Martin J. Nielsen, 2002, etc. In the uncertainty and corporate investment behavior relations, scholars have also been useful to explore. scholars study found that price uncertainty (Hartman, 1972 , Vivek and Prakash, 1996, the product market uncertainty (Caballero, 1991, Laarni T Bulan, 2005 and other factors, the investment behavior of enterprises will have a major impact.

Corporate investment behavior is an important basis for capital accumulation and business growth of the main motives. Present in China, the listed investment company in the industry over, the efficiency of blind investment and other non-diversified investment behavior is also common for the study of corporate investment behavior of growing domestic scholars are more interested in: Han Yan, et al (2003, Jun Yao et al (2004, Li Tao (2005 and other studies of investment behavior and firm performance relationship, Feng Wei (1999, Wei Feng and Xing (2004, Zhang Yi and Li Chen (2005, Wang Qiang (2008, GUO Jian-qiang and Zhang Jianbo (2009 other empirical test of the sensitivity of investment and cash flow problems, Zhu Wuxiang (2002, for the country and Qu Chunyan Zhang (2003 other analysis of business investment capital to invest in options, Shi Donghui (2000, Ho Jin Kang (2001), Du Lihong, and Zhu Wuxiang (2003, Hao Ying and Xing (2005 and other studies the preferences of our corporate financing and investment behavior. visible, scholars from various angles to analyze the investment behavior of enterprises, but the current very few scholars to start from the perspective of product market competition, corporate investment behavior. Xing, who Vivian, Hao Ying (2008 of product market competition and corporate investment behavior of empirical studies have found that the scale of investment in different sectors of business there are significant differences in their The study also found that business investment spending and product market competition intensity showed a significant negative correlation between the Gong Kai Chung, Chen Ying (2010 to introduce product market competition, the concept of empirical test of corporate investment spending and debt levels of correlation between empirical results show that intense competition in product markets industry, investment spending and the debt of listed companies a negative correlation between the level of non-competitive industries than in listed companies is more significant.


Third, the literature review and future research prospects

This paper reviews the domestic and foreign scholars on debt financing and corporate investment behavior relations literature. Foreign scholars for the shareholders - the conflict of creditors and liabilities of the camera control to play the role of research from two different perspective of the debt financing and the relationship between corporate investment behavior from the current situation of domestic research, the main current research scholars will be China's capital markets data, or simply apply Western theories to empirical tests shareholders - Zhai Quanren conflict and debt management functions of the camera to play issues. can not be ignored is that theory is the source of foreign in the more developed and sophisticated market, capital market developed, and our current period of economic transition in the fact that China's economic system and the environment, capital and industrial markets are significantly different from the situation abroad, so we can not simply theory applied to the foreign capital market research through review of the literature can be seen, most domestic scholars, empirical findings support the overall debt level and a negative correlation between investment spending, but if a further breakdown of the sample, as research starting point, the sample subdivision, different research methods, research scholars have come to conclusions different., this article reviews the foreign scholars on product market competition and micro-enterprise behavior (mainly referring to investment behavior research foreign scholars, mainly from market structure, market uncertainty, perfect competition, monopolistic competition point of view of corporate investment behavior for a more comprehensive analysis, demonstrated the product market competition on the behavior of micro-enterprises (including the important influence investment behavior.

In recent years, investment decisions based on the importance of enterprise development, coupled with the efficiency of China's emerging non-investment activities, which have attracted interest in the domestic scholars, scholars from various angles of our corporate investment behavior, such as the financing preference capital to invest, the investment - cash flow sensitivity, etc. However, most scholars of China's listed companies in all industries is as a research sample to explore the relationship between corporate investment and financing, which could have caused bias the findings because both theoretical and empirical that in different industries, different product market competition, corporate investment, debt level there is a big difference current product market competition in China from the perspective of the relationship between debt and investment behavior, little scholars, according to this article studied under literature, Xing et al (2008 empirical studies of product market competition and investment relationship, but does not explore in depth the introduction of product market competition factors of the relationship between investment and financing. Gong Kai Chung, Chen Ying (2010 integration product market competition for business investment the relationship between spending and debt levels empirical study found that fierce competition in the market sector listed companies in investment spending and liabilities of its negative correlation between the level of stronger, initially confirmed the product market competition will affect the relationship between corporate investment and financing, but The paper also there are more limitations, including the degree of product market competition on measurement methods, sample selection, business factors in the ultimate ownership.

Home and abroad through literature review and reviews relevant research, combined with our scholars in the field of Research, I believe that the future research in the field, you can try on the basis of previous research, from the perspective of product market competition, in-depth studies based on different product market competition, the status of the level of corporate investment behavior and the relationship between debt in the quantitative aspects of product market competition, I believe that there is still much to explore space, should not be limited to the use of financial performance indicators, considering the brand to and human resources structure indicators and behavioral indicators of the impact of competition in product markets, and that some of the products is a substitution effect between, so that may exist between different industries a competitive relationship in the study process, to fully consider the possible existence of cross-industry competition on the findings of the impact of the selected study sample, try to expand the sample size should not be limited to listed companies, the nature of the industry because some of its listed companies, the phenomenon of small, so that the sample of listed companies can not be a good proxy for the industry conditions, in addition, most of the listed company is the former joint-stock reform of state-owned enterprises have been made in the investment behavior is not completely out of the former state-owned enterprises to use funds for investment expansion of state-owned banks' investment hunger thirst disease "behavior, sources of funds in the investment funds from the state-owned banks into equity financing to capital, most companies still follow the original investment behavior of state-owned enterprises, large-scale investment and expansion, thus making the relevant studies, to combine the ultimate control over the nature of the enterprise to explore the micro-enterprise decision-making, and should not be generalized for all samples. All in all, combined with product market competition factors in corporate investment and financing relationship, future long way to go, the status of our country, this can not only enrich our country on the micro-enterprise investment and financing relationships, but also for China's listed companies and scientific investment decisions to provide empirical evidence, in addition, is also conducive to a better understanding of corporate investment and financing relationships for different company's debt financing arrangements to provide reasonable recommendations .


[References]
[1] GUO Jian-qiang, Zhang Jianbo. Uncertainty, financing constraints and corporate investment in new features - based on empirical research of listed companies [J]. Modern Finance, 2009 (2.

[2] Gong Kai Chung, Chen Ying. Corporate investment behavior and the relationship between debt level empirical research - based on product market competition perspective [J]. Accounting Communications, 2010 (12 Links to free download http://www. hi138.com