The study on the relationship between debt constraint and investment expenditure based on cash flow index: An empirical evidence from China's power listed companies

Based on finance data of the power listed companies 2005–2008, this paper establishes a model of liability cash flow indexes to study on the relativity between debt situation and investment expenditure. The research results show that debt can have a constraint effect on the investment expenditure of the listed electricity companies in China. Moreover, there exist significant differences in constraint effects of the different maturity structures and category structures in debt; we also find that there are remarkable negative relationships between the power listed companies' investment expenditure and the proportion of overall debt, longterm debt, bank loan and long-term loan. And this proves debt can play a constraint role in investment of the power listed companies, and the constraint effect of long-term debt is much better than that of short-term debt, bank loan outweighs commercial credit, and long-term loan is superior to short-term loan.