Environmental uncertainty, financing constraints and corporate investment: Evidence from China

Kaifeng Li, Bobo Xia, Yun Chen, Ning Ding and Jie Wang

Pacific-Basin Finance Journal, 2021, vol. 70, issue C

Abstract: This study uses A-share listed companies' financial data in China's Shanghai Stock Exchange from 2010 to 2019 to examine the impact of environmental uncertainty and financing constraints on corporate investment. It is found that environmental uncertainty not only restrains corporate investment directly but also reduces corporate investment through increased financing constraints indirectly. This negative effect is even more obvious in small-scale enterprises. Further research finds that environmental uncertainty has a heterogeneous impact on corporate investment efficiency. While inhibiting overinvested corporate investment behaviour and improving their investment efficiency, higher environmental uncertainty will reduce underinvested corporate investment and worsen their investment efficiency.

Keywords: Environmental uncertainty; Financing constraints; Corporate investment level; Corporate investment efficiency (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:70:y:2021:i:c:s0927538x21001724

DOI: 10.1016/j.pacfin.2021.101665

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