Spatial Spillover Effect of Financial Flexibility on Investment in China’s Convention and Exhibition Listed Companies

Abstract

Financial flexibility is an important research issue in corporate finance. This paper utilizes the Spatial Durbin Model (SDM) to analyze the impact of financial flexibility on the investment of Convention and Exhibition companies listed on the New Third Board from 2014 to 2016. The empirical results show the following. Firstly, the greater the financial flexibility, the more investment the firm will make. Secondly, the enhancement in financial flexibility would lead to an increase in investment of companies in the Convention and Exhibition industry in the local provinces, indicating that the financial flexibility has a significant positive intraregional spatial spillover effect on investment. On the other hand, financial flexibility has spatial spillover effects, and its rise will reduce the investment in other provinces, which could be explained by the competition effect between enterprises. Overall, we have further elucidated the role of different levels of financial flexibility on the investment of the Convention and Exhibition listed enterprises from the spatial dimension, thereby enriching the existing research on corporate financial flexibility and corporate value to some certain extent.

Direct Effect and Spillover Effect of ICT on Electricity Consumption in China: Evidence from a Spatial Panel Analysis

“…It should be pointed out that there are numerous options for the spatial weight matrix [62,63]. In this paper, refer to the practice of Yu et al [63], economic distance weight (W) is adopted, in which the definition of element w ij in W is as follows: If i ≠ j, w ij � 1/|y i − y j |; otherwise, i � j, w ij � 0, where y i and y j are the average of the real GDP of the i-th province and the j-th province during the sample period.…”