The Impact of Debt Financing on Investment

Author

Zhu, Lei

Author_Institution

Accounting Dept., Shandong Univ. of Finance, Jinan, China

fYear

2009

fDate

13-14 Dec. 2009

Firstpage

463

Lastpage

466

Abstract

Using a panel data set of Chinese manufacturing listed companies, this paper investigates the impact of debt financing on investment of companies. It is found that debt has a significantly negative effect on investment in the whole samples. In order to distinguish the influence mechanism of debt financing on investment, the paper divides the whole sample into two sub-groups according to growth opportunity and CFO. In the high growth opportunity low CFO group debt has a significantly negative effect on investment but in the low growth opportunity high CFO group it does not have. That is to say debt does not inhibit the inefficiency of investment in China.

Keywords

industrial economics; investment; CFO group debt; Chinese manufacturing listed companies; debt financing; growth opportunity; investment; Asset management; Conference management; Contingency management; Costs; Financial management; Information management; Information technology; Investments; Technology management; Testing; corporate governance; debt financing; manufacturing listed company; over-investment; under-investment;

fLanguage

English

Publisher

ieee

Conference_Titel

Future Information Technology and Management Engineering, 2009. FITME '09. Second International Conference on

Conference_Location

Sanya

Print_ISBN

978-1-4244-5339-9

Type

conf

DOI

10.1109/FITME.2009.122

Filename

5381028