# Corporate Financing Constraints and Information Disclosure: An Analysis of Corporate Investment Dilemmas under the Wave of Counter-Globalization

Authors: Li Xu; Qian Duan; Xinyu Cao
Journal: Journal of Sensors
 (2022)

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## Abstract

Open and transparent market information is a prerequisite to maintain the order of financial market and guarantee the normal financing of enterprises. In the real financial market, there is inevitably market information asymmetry. Information asymmetry has become a key factor in corporate financing constraints, and capital market information disclosure is conducive to solve problems such as information asymmetry in the capital market and smooth the financing channels of companies. In the process of economic globalization, some developed countries and industrial classes with damaged interests have set off a wave of counter-globalization, under which export-oriented enterprises in various countries are facing a series of investment dilemmas, which affect their choice of investment direction. In this paper, we study the relationship between corporate financing constraints and information disclosure, introduce information disclosure quality indicators and financing constraint measurement models, and analyze corporate investment dilemmas based on international disputes under the wave of counter-globalization.


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## Body

## 1. Introduction

Adequate capital is the source and guarantee for the normal operation of enterprises, and financing activities play an important role in raising capital for enterprises and play an irreplaceable role in securing the source of capital for enterprises. Financing constraints are a series of dilemmas faced by enterprises in financing. As a major problem for enterprises, the financing constraint is mainly reflected in two aspects: firstly, in the quantity of financing, due to the influence of inflation, the CPI (Consumer Price Index) is rising, and the government implements a tight monetary policy, and then, those enterprises that originally have financial difficulties will declare bankruptcy due to the shortage of funds. The second point is the access to financing: in the Chinese capital market, for example, commercial banks in the context of the debt financing market “discriminate” in providing loans to different enterprises [1]. The reasons for this “discrimination” are, on the one hand, institutional factors, i.e., most Chinese commercial banks are state-owned, and when granting credit, banks prefer state-owned enterprises or state-controlled enterprises with which they have a closer relationship, while private enterprises are often not favored by commercial banks; on the other hand, market selection is to prevent and resolve. On the other hand, in order to prevent and solve financial risks, commercial banks that provide loans to enterprises prefer to lend to those enterprises with balanced financial balances and reasonable corporate management structures.In the capital market, the degree of information symmetry is a factor that cannot be ignored by investors. The degree of accuracy of information, the speed and fluency of the information transmission process, and the ability to use information directly determine the success or failure of investors. In reality, there is a serious information asymmetry in the capital market. The capital market information disclosure has an irreplaceable role in promoting the openness and transparency of market information by publicly disclosing the company and company-related information to the public and investors [2]. Information disclosure has gradually become a strong driving force for the development of the capital market and an effective guideline for resolving market information asymmetry, and it is a hot issue in modern finance research that keeps appearing in people’s eyes.Counter-globalization is the inevitable product of economic globalization after its inherent shortcomings are exposed at a certain stage of development. The original purpose of economic globalization is to promote the economic development and prosperity of all countries in the world, but when the superiority brought by this phenomenon cannot compensate for the disadvantages it causes, it will make part of the masses lose their confidence in economic globalization and thus oppose the development of economic globalization. The most affected enterprises under counter-globalization are the outward-oriented enterprises targeting overseas markets. Under this wave, export-oriented enterprises face various investment dilemmas.


## 2. Research Background

In the 1980s and 1990s, the General Agreement on Tariffs and Trade (GATT) was replaced by the World Trade Organization (WTO), which opposes tariff barriers and advocates and pursues free trade, as the world landscape evolved [3]. At the same time, the rapid development of aviation and shipping, computers, Internet, precision instrument manufacturing, and mobile communication technologies created favorable conditions for the optimal allocation of global production factors, promoted the improvement of the global production value chain, and facilitated the smooth development of international division of labor cooperation. Based on the new form of international division of labor, multinational companies of developed countries allocate the production of products in different production cycles to countries and regions with higher abundance of production factors (the state of resources owned by a country) in order to facilitate the pursuit of the highest profits [4]. However, placing production factors into international production, multinational companies always monopolize the most valuable stages of the production value chain, i.e., research and development, design, marketing links, etc., while transferring low-profit, low-technology stages such as assembly, manufacturing, and processing to developing countries and regions, breaking the inherent pattern of product value chain distribution within global trade and determining the final pattern of international division of labor. The division of labor in the production value chain of products is shown in Figure 1.Figure 1
Production value chain division of labor links.In 2008, the financial crisis broke out in the United States and spread to the world financial and economic markets. The total demand of the global economy fell off a cliff and the growth rate of international trade dropped by about 50%. At the same time, the foreign investment of overseas enterprises and multinational corporations worldwide shrank significantly [5] and has been in the doldrums for several years since then, with no sign of recovery so far and a large difference from the level before the outbreak of the crisis. The economic development of the world’s major economies, represented by the United States and Japan, is far from what it used to be, and the gap between the rich and the poor has widened. The worldwide wave of antiglobalization was triggered by the “Occupy Wall Street” movement in the US in 2011, after which the wave of antiglobalization began to spread around the world with the US as the center. However, the wave of counter-globalization at this stage was only in the private sector, and the main promoters were the private sector. A series of international political events, such as the trade frictions between the United States and China, the announcement of the United Kingdom’s withdrawal from the European Union, and the growing popularity of populist parties in France, Germany, and Italy, all signaled a new wave of reverse globalization [6]. Enterprises in various countries can no longer ignore the impact of the wave of counter-globalization on their own development, and then, they have to seek a benign development path to help them transform and upgrade to help themselves out of their investment difficulties.Unilateralism, protectionism, and feudal secularism are on the rise. The current wave of counter-globalization is driven by governments and has a new political character. In international trade and investment, the main features of reverse economic globalization are reflected in the gradual marginalization of multilateral trade and bilateral trade advocated by the WTO and the collapse of global multilateral trade and investment rules and governance mechanisms in the General Free Trade Agreement and the opening of a reconstructed pattern of the original global industrial chain of multinational corporations in specific countries and regions [7]. For example, in recent years, many MNCs from the US, UK, Korea, and Japan have started to leave China and move to other emerging economies or to other developing countries. In addition, in order to hinder the realization of the “Made in China 2025” goal, the United States, under the guise of balancing the trade deficit with China, announced in 2018 a significant increase in tariffs on more than 500 billion dollars worth of goods exported from China to the country, despite twelve rounds of negotiations between China and the United States in September 2019. The US side still decided to impose an additional 5% tariff on more than 500 billion worth of goods imported from China. Not only that, Trump also called on domestic multinational companies to transfer overseas manufacturing orders from China to their home countries as soon as possible after taking office and introduced a series of policies to attract foreign investment in a bid to revitalize domestic manufacturing and improve domestic employment. The US tariff rates on products imported from China from 2017 to 2019 are shown in Figure 2.Figure 2
Historical trend of the average US tariffs on China, rising from 3.1% to 24.3% in a two-year period.As can be seen from the data in Figure2, in just two years, the average US tariff on China has risen from less than 4% to 24.3%, an increase of about 21%. The average tariff in 2018 was about 12.5%, up about 9.4% compared to 2017, and the average tariff in May 2019 was about 18.5%, up about 6% compared to 2018, showing a rapid rise in the overall tariff level. The monthly amounts of US imports from China in September and December are shown in Figure 3.Figure 3
Changes in monthly import amounts of goods in the September tariff increase list (blue line) and December tariff increase list (orange line).The blue curve from Figure3 represents the September 1 list (including only textiles, footwear, and apparel), and the orange curve represents the December 15 list. The total title of the tax increase list in September shows a stable state, hovering around $300 million, with the highest not exceeding $400 million and the lowest not less than $200 million. The tax increase list changes more significantly in December and shows a clear peak state with a cyclical character [8]. The lowest monthly amount of each year usually occurs from March to May, and the highest monthly amount usually occurs from November to December. And the minimum monthly amount is not less than 800 million USD, and the maximum monthly amount is not higher than 2 billion USD.In the new context of reverse economic globalization, multinational companies have started to reorganize their internal industrial chain and reshape the global value chain through a series of measures. What are the challenges that contemporary export-oriented enterprises will face in the process of integrating with global value chains? Are there any measures and methods to solve these difficulties? Therefore, a reasonable analysis and prediction of the risks and challenges that the current external environment of counter-globalization will bring to outward-oriented enterprises’ foreign investment is a practical way for these enterprises to mitigate the adverse effects of counter-globalization on their own investment activities, as well as to facilitate the innovative development of outward-oriented enterprises, optimize their industrial structure, and improve their trade level.


## 3. Materials and Methods

### 3.1. Information Disclosure and Financing Constraints

#### 3.1.1. The Effect of Information Disclosure on Financing Constraints

In the 1970s, Akerlof proposed the principle of “lemon market” for market information asymmetry, explaining in detail how buyers and sellers in a market can cause market failure due to information asymmetry. Jensen and McLean (1976) expressed the view that whether equity or debt financing is undertaken, the insider structure cannot avoid the imbalance of power and responsibility due to distorted incentives. In the case of debt financing, low financial leverage creates concerns for insiders and makes them conservative in their investment behavior when the cost of bankruptcy is not accounted for. High financial leverage, on the other hand, can have an aggressive effect on insiders’ investment behavior. Although insiders’ investment behavior is risky at this point, it is often accompanied by high returns if successful. If the investment is unsuccessful, most of the resulting losses are borne by the creditors [9]. Based on the above logic, Jensen and McLean (1976) published the concept of cost replacement of financial market contracts, i.e., in principle, the existence of a specific capital structure that can dissolve the replacement cost of financial contracts. The existence of replacement costs leads to the fact that the cost of internal financing is less than that of external financing that the two cannot produce a substitution elimination relationship, and that as long as the size relationship between the two does not change, the phenomenon of corporate underinvestment will occur because the total amount of funds necessary for investment spending cannot be met. Green-Wald combines the above theories to propose the idea that risk premiums accompany information asymmetry, showing that investors’ expected returns increase due to the increase in the level of risk premiums, while other investment projects lose market competitiveness due to the level of risk premiums that do not meet investors’ expectations, and firms that focus on such projects will face the pressure of greater financing constraints.Information asymmetry can undermine the rules of market transactions, interfere with market order, and hinder the role of market mechanisms. An effective way to eliminate market information asymmetry is based on studying the behavior of vendors in economic statistics. Generally speaking, manufacturers are motivated by the purpose of profit maximization, and their decisions can reflect to some extent the heart expectations and actual situation of manufacturers. On this basis, the signaling theory was developed. According to the signaling theory, the investment and financing decisions of investors send signals to the outside world about the financial information and development status of the manufacturer [10]. Usually companies whose financing structure is chosen with signaling effect are high-quality companies. Based on the increase in the proportion of debt financing, the capital market sends the message that having quality investment projects does not mean that the company’s management will favor equity financing when the share price is higher than the market value, because the choice of equity financing will send the wrong message to the market and bring negative effects, which will eventually bring about a fall in the share price. In addition, excessive administrative intervention will further exacerbate the degree of information differentiation in market behavior. As the pace of socialist market economy with Chinese characteristics accelerates and market allocation occupies a dominant position in resource allocation, the transparency and openness of the market environment becomes a necessary condition to adapt to market allocation of resources. This requires an information disclosure system to be implemented for listed companies in order to promote openness and transparency of the market and improve market efficiency.The Shanghai Stock Exchange and Shenzhen Stock Exchange jointly issued the Information Disclosure Work Assessment Program for Listed Companies (hereinafter referred to as “the Program”) in June 2001 [11]. The Program stipulates that the exchange mainly evaluates the rewards and punishments of listed companies and provides a certain degree of public disclosure of accurate, complete, and legal information to meet the principle of transparency and openness of market transactions. Based on the evaluation results, the company’s information disclosure is classified into five levels from high to low: high, high, moderate, low, and low. The evaluation results are publicized in the securities trading section of the company for the reference of the public, as shown in Figure 4.Figure 4
Company information disclosure quality rating.


#### 3.1.2. Selection of Information Disclosure Quality Indicators

Although the importance of the information disclosure system has attracted a high degree of attention from all walks of life, it still lacks a clear unified indicator for measuring the quality of information disclosure. Each enterprise should grasp a certain proportion when implementing information disclosure, in order to avoid not only too much information concealment caused by insufficient information disclosure, but also leakage and damage to the company’s interests caused by excessive information disclosure. In April 1996, the US Securities and Exchange Commission introduced the concept of transparency as an important indicator of information disclosure. Generally speaking, transparency refers to how easy it is for information users to grasp information on capital flows of listed companies by means of accessing data. With the joint efforts of some experts and scholars, the concept of transparency has been supplemented and refined, based on which the Basel Committee has divided transparency into six aspects, as shown in Figure5.Figure 5
The six aspects of transparency.According to the above division criteria, scholars at home and abroad mainly obtain information disclosure measurement indexes through three ways.One is to study the indexes specified by scholars themselves. For example, Botosan (1997) classifies the information voluntarily disclosed in the annual reports of companies and sets various specific items according to the characteristics of each type of information and finally produces 28 indicators to measure the quality of information disclosure according to the principle of transparency and sets the corresponding ratio for these indicators to score, and the final result represents the level of information disclosure quality. The second is the measurement indicators from the side of authoritative institutions. Third is the selection of certain alternative indicators that can reflect the quality of information disclosure of the company, such as the selection of surplus quality and earnings opacity [12].


### 3.2. Financing Constraint Metric Model

#### 3.2.1. Sample Selection and Data Sources

The sample data chosen by the researchers are selected from the Shenzhen Stock Exchange. In addition, due to the special nature of the financing method of ST companies, there are significant differences between such companies and the traditional disclosure system of listed companies. In order to eliminate the interference and influence of the sample differences on the research process, such companies are not suitable as research subjects and need to be eliminated. And in order not to be affected by the extreme values, the researchers excluded the data samples that exceeded 10% of the mean.


#### 3.2.2. Model Design

The model used in this paper is the financing constraint model proposed by Almeida in 2004. According to the design concept of the model, when a listed company faces the problem of financing constraints, a smart operator will plan well between the internal cash flow of the company now and the future cash flow, and whenever there is a positive NPV item, the company will be able to use the cash flow from inventory as a financing item and other financing needs [13] and take a portion of the current cash flow as a prefunding of future cash flow for occasional needs. Almeida determined the final basic model of corporate financing constraints after a series of mathematical proofs. The researchers used the following extended model based on the basic model, adhering to the extended model can be expressed in the following equation:
(1)DependentVariable=α+βiExplanatoryVariables+γiControlVariables+ε.According to the above model, the explanatory variables are BJ, CL,BJ∗CL, FM1, FM1∗BJ, FM2, and FM2∗BJ. BJ denotes net cash flows generated for capital activities/average total assets, CL denotes disclosure quality, and FM denotes the level of financial development. The control variables are SIZE, NMC, and Tobing. SIZE denotes the size of the firm, NMC denotes liquidity/average total assets, and Tobing denotes the firm’s ability to grow. ε represents the residuals, and the explanatory variable is CH, which is interpreted as net increase in cash and cash equivalents/average total assets. The specific definitions of the variables are shown in Table 1.Table 1
Specific definition and description of each variable.
Variable nameVariable definitionVariable descriptionΔCHCash holdingsCashholdings=netincreaseincashandcashequivalents/totalassetsatendofperiodBJCash flowNet cash flow from operating activities/total assets at end of periodCLInformation disclosure qualityExcellent, good, pass, and fail are set as 1, 2, 3, and 4 in that orderFMFinancial development level indexFM1, FM2, and FM1 indicate the total loans of financial institutions in each region/GDP in each region; FM2 indicates the total stock market value in each region/GDP in each regionSIZECompany sizeTake the logarithm of average total assetsNMCNet working capitalNetworkingcapital=currentassets−currentliabilities/totalassetsattheendoftheperiodTobingCompany growth capacityThe ratio between the market value of a company and its replacement value, where market value equals the sum of stock value and bonds, and replacement value refers to the book value of the company. The equity value of a company’s market value consists of two components: the value of current shares and the value of nonmarketable sharesAccording to Almeida’s basic model and the theoretical study made in this paper, it is possible to make the following measurements: if a listed company has a financing constraint dilemma [14], its cash flow from operating income will have a greater impact on the company’s cash inventory, which can also be understood that the company will be too dependent on the internal cash flow for the funds needed for future investments.To ensure the reliability and completeness of the results, this paper uses the improved investment model equations to make a test of the Almeida basic model. The basic equation of the improved investment model equation is shown as follows:(2)IKit=β0+β1IKi,t−1+β2IK2i,t−1+β3YKi,t−1+β4CFKi,t−1+εit.In equation (2), i represents the company, t represents the year, I represents the investment expenditure (cash paid for fixed asset investment), K represents the initial total assets, Y represents the main business income, and CF represents the cash flow (net cash flow generated by the operating activities of the enterprise).


## 3.1. Information Disclosure and Financing Constraints

### 3.1.1. The Effect of Information Disclosure on Financing Constraints

In the 1970s, Akerlof proposed the principle of “lemon market” for market information asymmetry, explaining in detail how buyers and sellers in a market can cause market failure due to information asymmetry. Jensen and McLean (1976) expressed the view that whether equity or debt financing is undertaken, the insider structure cannot avoid the imbalance of power and responsibility due to distorted incentives. In the case of debt financing, low financial leverage creates concerns for insiders and makes them conservative in their investment behavior when the cost of bankruptcy is not accounted for. High financial leverage, on the other hand, can have an aggressive effect on insiders’ investment behavior. Although insiders’ investment behavior is risky at this point, it is often accompanied by high returns if successful. If the investment is unsuccessful, most of the resulting losses are borne by the creditors [9]. Based on the above logic, Jensen and McLean (1976) published the concept of cost replacement of financial market contracts, i.e., in principle, the existence of a specific capital structure that can dissolve the replacement cost of financial contracts. The existence of replacement costs leads to the fact that the cost of internal financing is less than that of external financing that the two cannot produce a substitution elimination relationship, and that as long as the size relationship between the two does not change, the phenomenon of corporate underinvestment will occur because the total amount of funds necessary for investment spending cannot be met. Green-Wald combines the above theories to propose the idea that risk premiums accompany information asymmetry, showing that investors’ expected returns increase due to the increase in the level of risk premiums, while other investment projects lose market competitiveness due to the level of risk premiums that do not meet investors’ expectations, and firms that focus on such projects will face the pressure of greater financing constraints.Information asymmetry can undermine the rules of market transactions, interfere with market order, and hinder the role of market mechanisms. An effective way to eliminate market information asymmetry is based on studying the behavior of vendors in economic statistics. Generally speaking, manufacturers are motivated by the purpose of profit maximization, and their decisions can reflect to some extent the heart expectations and actual situation of manufacturers. On this basis, the signaling theory was developed. According to the signaling theory, the investment and financing decisions of investors send signals to the outside world about the financial information and development status of the manufacturer [10]. Usually companies whose financing structure is chosen with signaling effect are high-quality companies. Based on the increase in the proportion of debt financing, the capital market sends the message that having quality investment projects does not mean that the company’s management will favor equity financing when the share price is higher than the market value, because the choice of equity financing will send the wrong message to the market and bring negative effects, which will eventually bring about a fall in the share price. In addition, excessive administrative intervention will further exacerbate the degree of information differentiation in market behavior. As the pace of socialist market economy with Chinese characteristics accelerates and market allocation occupies a dominant position in resource allocation, the transparency and openness of the market environment becomes a necessary condition to adapt to market allocation of resources. This requires an information disclosure system to be implemented for listed companies in order to promote openness and transparency of the market and improve market efficiency.The Shanghai Stock Exchange and Shenzhen Stock Exchange jointly issued the Information Disclosure Work Assessment Program for Listed Companies (hereinafter referred to as “the Program”) in June 2001 [11]. The Program stipulates that the exchange mainly evaluates the rewards and punishments of listed companies and provides a certain degree of public disclosure of accurate, complete, and legal information to meet the principle of transparency and openness of market transactions. Based on the evaluation results, the company’s information disclosure is classified into five levels from high to low: high, high, moderate, low, and low. The evaluation results are publicized in the securities trading section of the company for the reference of the public, as shown in Figure 4.Figure 4
Company information disclosure quality rating.


### 3.1.2. Selection of Information Disclosure Quality Indicators

Although the importance of the information disclosure system has attracted a high degree of attention from all walks of life, it still lacks a clear unified indicator for measuring the quality of information disclosure. Each enterprise should grasp a certain proportion when implementing information disclosure, in order to avoid not only too much information concealment caused by insufficient information disclosure, but also leakage and damage to the company’s interests caused by excessive information disclosure. In April 1996, the US Securities and Exchange Commission introduced the concept of transparency as an important indicator of information disclosure. Generally speaking, transparency refers to how easy it is for information users to grasp information on capital flows of listed companies by means of accessing data. With the joint efforts of some experts and scholars, the concept of transparency has been supplemented and refined, based on which the Basel Committee has divided transparency into six aspects, as shown in Figure5.Figure 5
The six aspects of transparency.According to the above division criteria, scholars at home and abroad mainly obtain information disclosure measurement indexes through three ways.One is to study the indexes specified by scholars themselves. For example, Botosan (1997) classifies the information voluntarily disclosed in the annual reports of companies and sets various specific items according to the characteristics of each type of information and finally produces 28 indicators to measure the quality of information disclosure according to the principle of transparency and sets the corresponding ratio for these indicators to score, and the final result represents the level of information disclosure quality. The second is the measurement indicators from the side of authoritative institutions. Third is the selection of certain alternative indicators that can reflect the quality of information disclosure of the company, such as the selection of surplus quality and earnings opacity [12].


## 3.1.1. The Effect of Information Disclosure on Financing Constraints

In the 1970s, Akerlof proposed the principle of “lemon market” for market information asymmetry, explaining in detail how buyers and sellers in a market can cause market failure due to information asymmetry. Jensen and McLean (1976) expressed the view that whether equity or debt financing is undertaken, the insider structure cannot avoid the imbalance of power and responsibility due to distorted incentives. In the case of debt financing, low financial leverage creates concerns for insiders and makes them conservative in their investment behavior when the cost of bankruptcy is not accounted for. High financial leverage, on the other hand, can have an aggressive effect on insiders’ investment behavior. Although insiders’ investment behavior is risky at this point, it is often accompanied by high returns if successful. If the investment is unsuccessful, most of the resulting losses are borne by the creditors [9]. Based on the above logic, Jensen and McLean (1976) published the concept of cost replacement of financial market contracts, i.e., in principle, the existence of a specific capital structure that can dissolve the replacement cost of financial contracts. The existence of replacement costs leads to the fact that the cost of internal financing is less than that of external financing that the two cannot produce a substitution elimination relationship, and that as long as the size relationship between the two does not change, the phenomenon of corporate underinvestment will occur because the total amount of funds necessary for investment spending cannot be met. Green-Wald combines the above theories to propose the idea that risk premiums accompany information asymmetry, showing that investors’ expected returns increase due to the increase in the level of risk premiums, while other investment projects lose market competitiveness due to the level of risk premiums that do not meet investors’ expectations, and firms that focus on such projects will face the pressure of greater financing constraints.Information asymmetry can undermine the rules of market transactions, interfere with market order, and hinder the role of market mechanisms. An effective way to eliminate market information asymmetry is based on studying the behavior of vendors in economic statistics. Generally speaking, manufacturers are motivated by the purpose of profit maximization, and their decisions can reflect to some extent the heart expectations and actual situation of manufacturers. On this basis, the signaling theory was developed. According to the signaling theory, the investment and financing decisions of investors send signals to the outside world about the financial information and development status of the manufacturer [10]. Usually companies whose financing structure is chosen with signaling effect are high-quality companies. Based on the increase in the proportion of debt financing, the capital market sends the message that having quality investment projects does not mean that the company’s management will favor equity financing when the share price is higher than the market value, because the choice of equity financing will send the wrong message to the market and bring negative effects, which will eventually bring about a fall in the share price. In addition, excessive administrative intervention will further exacerbate the degree of information differentiation in market behavior. As the pace of socialist market economy with Chinese characteristics accelerates and market allocation occupies a dominant position in resource allocation, the transparency and openness of the market environment becomes a necessary condition to adapt to market allocation of resources. This requires an information disclosure system to be implemented for listed companies in order to promote openness and transparency of the market and improve market efficiency.The Shanghai Stock Exchange and Shenzhen Stock Exchange jointly issued the Information Disclosure Work Assessment Program for Listed Companies (hereinafter referred to as “the Program”) in June 2001 [11]. The Program stipulates that the exchange mainly evaluates the rewards and punishments of listed companies and provides a certain degree of public disclosure of accurate, complete, and legal information to meet the principle of transparency and openness of market transactions. Based on the evaluation results, the company’s information disclosure is classified into five levels from high to low: high, high, moderate, low, and low. The evaluation results are publicized in the securities trading section of the company for the reference of the public, as shown in Figure 4.Figure 4
Company information disclosure quality rating.


## 3.1.2. Selection of Information Disclosure Quality Indicators

Although the importance of the information disclosure system has attracted a high degree of attention from all walks of life, it still lacks a clear unified indicator for measuring the quality of information disclosure. Each enterprise should grasp a certain proportion when implementing information disclosure, in order to avoid not only too much information concealment caused by insufficient information disclosure, but also leakage and damage to the company’s interests caused by excessive information disclosure. In April 1996, the US Securities and Exchange Commission introduced the concept of transparency as an important indicator of information disclosure. Generally speaking, transparency refers to how easy it is for information users to grasp information on capital flows of listed companies by means of accessing data. With the joint efforts of some experts and scholars, the concept of transparency has been supplemented and refined, based on which the Basel Committee has divided transparency into six aspects, as shown in Figure5.Figure 5
The six aspects of transparency.According to the above division criteria, scholars at home and abroad mainly obtain information disclosure measurement indexes through three ways.One is to study the indexes specified by scholars themselves. For example, Botosan (1997) classifies the information voluntarily disclosed in the annual reports of companies and sets various specific items according to the characteristics of each type of information and finally produces 28 indicators to measure the quality of information disclosure according to the principle of transparency and sets the corresponding ratio for these indicators to score, and the final result represents the level of information disclosure quality. The second is the measurement indicators from the side of authoritative institutions. Third is the selection of certain alternative indicators that can reflect the quality of information disclosure of the company, such as the selection of surplus quality and earnings opacity [12].


## 3.2. Financing Constraint Metric Model

### 3.2.1. Sample Selection and Data Sources

The sample data chosen by the researchers are selected from the Shenzhen Stock Exchange. In addition, due to the special nature of the financing method of ST companies, there are significant differences between such companies and the traditional disclosure system of listed companies. In order to eliminate the interference and influence of the sample differences on the research process, such companies are not suitable as research subjects and need to be eliminated. And in order not to be affected by the extreme values, the researchers excluded the data samples that exceeded 10% of the mean.


### 3.2.2. Model Design

The model used in this paper is the financing constraint model proposed by Almeida in 2004. According to the design concept of the model, when a listed company faces the problem of financing constraints, a smart operator will plan well between the internal cash flow of the company now and the future cash flow, and whenever there is a positive NPV item, the company will be able to use the cash flow from inventory as a financing item and other financing needs [13] and take a portion of the current cash flow as a prefunding of future cash flow for occasional needs. Almeida determined the final basic model of corporate financing constraints after a series of mathematical proofs. The researchers used the following extended model based on the basic model, adhering to the extended model can be expressed in the following equation:
(1)DependentVariable=α+βiExplanatoryVariables+γiControlVariables+ε.According to the above model, the explanatory variables are BJ, CL,BJ∗CL, FM1, FM1∗BJ, FM2, and FM2∗BJ. BJ denotes net cash flows generated for capital activities/average total assets, CL denotes disclosure quality, and FM denotes the level of financial development. The control variables are SIZE, NMC, and Tobing. SIZE denotes the size of the firm, NMC denotes liquidity/average total assets, and Tobing denotes the firm’s ability to grow. ε represents the residuals, and the explanatory variable is CH, which is interpreted as net increase in cash and cash equivalents/average total assets. The specific definitions of the variables are shown in Table 1.Table 1
Specific definition and description of each variable.
Variable nameVariable definitionVariable descriptionΔCHCash holdingsCashholdings=netincreaseincashandcashequivalents/totalassetsatendofperiodBJCash flowNet cash flow from operating activities/total assets at end of periodCLInformation disclosure qualityExcellent, good, pass, and fail are set as 1, 2, 3, and 4 in that orderFMFinancial development level indexFM1, FM2, and FM1 indicate the total loans of financial institutions in each region/GDP in each region; FM2 indicates the total stock market value in each region/GDP in each regionSIZECompany sizeTake the logarithm of average total assetsNMCNet working capitalNetworkingcapital=currentassets−currentliabilities/totalassetsattheendoftheperiodTobingCompany growth capacityThe ratio between the market value of a company and its replacement value, where market value equals the sum of stock value and bonds, and replacement value refers to the book value of the company. The equity value of a company’s market value consists of two components: the value of current shares and the value of nonmarketable sharesAccording to Almeida’s basic model and the theoretical study made in this paper, it is possible to make the following measurements: if a listed company has a financing constraint dilemma [14], its cash flow from operating income will have a greater impact on the company’s cash inventory, which can also be understood that the company will be too dependent on the internal cash flow for the funds needed for future investments.To ensure the reliability and completeness of the results, this paper uses the improved investment model equations to make a test of the Almeida basic model. The basic equation of the improved investment model equation is shown as follows:(2)IKit=β0+β1IKi,t−1+β2IK2i,t−1+β3YKi,t−1+β4CFKi,t−1+εit.In equation (2), i represents the company, t represents the year, I represents the investment expenditure (cash paid for fixed asset investment), K represents the initial total assets, Y represents the main business income, and CF represents the cash flow (net cash flow generated by the operating activities of the enterprise).


## 3.2.1. Sample Selection and Data Sources

The sample data chosen by the researchers are selected from the Shenzhen Stock Exchange. In addition, due to the special nature of the financing method of ST companies, there are significant differences between such companies and the traditional disclosure system of listed companies. In order to eliminate the interference and influence of the sample differences on the research process, such companies are not suitable as research subjects and need to be eliminated. And in order not to be affected by the extreme values, the researchers excluded the data samples that exceeded 10% of the mean.


## 3.2.2. Model Design

The model used in this paper is the financing constraint model proposed by Almeida in 2004. According to the design concept of the model, when a listed company faces the problem of financing constraints, a smart operator will plan well between the internal cash flow of the company now and the future cash flow, and whenever there is a positive NPV item, the company will be able to use the cash flow from inventory as a financing item and other financing needs [13] and take a portion of the current cash flow as a prefunding of future cash flow for occasional needs. Almeida determined the final basic model of corporate financing constraints after a series of mathematical proofs. The researchers used the following extended model based on the basic model, adhering to the extended model can be expressed in the following equation:
(1)DependentVariable=α+βiExplanatoryVariables+γiControlVariables+ε.According to the above model, the explanatory variables are BJ, CL,BJ∗CL, FM1, FM1∗BJ, FM2, and FM2∗BJ. BJ denotes net cash flows generated for capital activities/average total assets, CL denotes disclosure quality, and FM denotes the level of financial development. The control variables are SIZE, NMC, and Tobing. SIZE denotes the size of the firm, NMC denotes liquidity/average total assets, and Tobing denotes the firm’s ability to grow. ε represents the residuals, and the explanatory variable is CH, which is interpreted as net increase in cash and cash equivalents/average total assets. The specific definitions of the variables are shown in Table 1.Table 1
Specific definition and description of each variable.
Variable nameVariable definitionVariable descriptionΔCHCash holdingsCashholdings=netincreaseincashandcashequivalents/totalassetsatendofperiodBJCash flowNet cash flow from operating activities/total assets at end of periodCLInformation disclosure qualityExcellent, good, pass, and fail are set as 1, 2, 3, and 4 in that orderFMFinancial development level indexFM1, FM2, and FM1 indicate the total loans of financial institutions in each region/GDP in each region; FM2 indicates the total stock market value in each region/GDP in each regionSIZECompany sizeTake the logarithm of average total assetsNMCNet working capitalNetworkingcapital=currentassets−currentliabilities/totalassetsattheendoftheperiodTobingCompany growth capacityThe ratio between the market value of a company and its replacement value, where market value equals the sum of stock value and bonds, and replacement value refers to the book value of the company. The equity value of a company’s market value consists of two components: the value of current shares and the value of nonmarketable sharesAccording to Almeida’s basic model and the theoretical study made in this paper, it is possible to make the following measurements: if a listed company has a financing constraint dilemma [14], its cash flow from operating income will have a greater impact on the company’s cash inventory, which can also be understood that the company will be too dependent on the internal cash flow for the funds needed for future investments.To ensure the reliability and completeness of the results, this paper uses the improved investment model equations to make a test of the Almeida basic model. The basic equation of the improved investment model equation is shown as follows:(2)IKit=β0+β1IKi,t−1+β2IK2i,t−1+β3YKi,t−1+β4CFKi,t−1+εit.In equation (2), i represents the company, t represents the year, I represents the investment expenditure (cash paid for fixed asset investment), K represents the initial total assets, Y represents the main business income, and CF represents the cash flow (net cash flow generated by the operating activities of the enterprise).


## 4. Results and Discussion

### 4.1. Statistical Analysis of Information Disclosure Appraisal Results

By using the financing constraint model, the results of information disclosure appraisal are obtained as shown in Table2.Table 2
Results of information disclosure assessment.
YearExcellentGoodQualifiedFailedTotalNumber of companiesProportionNumber of companiesProportionNumber of companiesProportionNumber of companiesProportion2017509.31%30456.61%14727.37%366.70%5372018559.30%31653.47%18931.98%315.25%5912019649.03%37552.89%24334.27%273.81%70920208210.57%46860.31%20826.81%182.32%77620219611.59%57168.96%14517.51%161.93%828A combined34710.08%203459.11%93227.09%1283.72%3441The data in the table showed the overall quality preference of information disclosure of listed companies from 2017 to 2021. The number of qualified or above companies accounted for 96.28% of the total number of companies, among which the number of companies with good information disclosure quality accounted for 59.11%, and the number of excellent companies accounted for 10.08%. From the overall change trend of time, the quality of information disclosure of the company shows a trend of improvement year by year. The proportion of unqualified companies in information disclosure is decreasing year by year, from 6.70% in 2017 to 1.93% in 2021. The number of companies with good information disclosure quality is on the rise. The number of companies with excellent information disclosure quality also increased from 56.61% in 2017 to 68.96% in 2021. The number of companies with excellent information disclosure quality also increased from 9.31% in 2017 to 11.59% in 2021.The trend chart of information disclosure evaluation results is shown in Figure6.Figure 6
Trend chart of information disclosure evaluation results of listed companies from 2017 to 2021.


### 4.2. The Dilemma of Enterprise Investment in the Antiglobalization Tide

#### 4.2.1. Enterprise Safety Margin Reduction

In recent years, global trade and investment rules under the WTO have not changed significantly despite the maneuvering of various parties and multiple rounds of negotiations. Therefore, multilateral trade rules in the international economy are impacted by bilateral free trade negotiations in a smaller scope between the two countries, rather than bilateral or multilateral trade rules in a larger scope, which can be regarded as the practical outcome of the antieconomic globalization wave [15]. In 2017, US President Donald Trump called for the reestablishment of multilateral trade agreements. In his view, the US must withdraw from existing multilateral trade agreements and negotiate new ones with UN member states.Based on the change of the international social environment, economic globalization also presents new characteristics; under these characteristics, free trade, trade protectionism, all sorts of unilateralism, and nationalism raged; the world economic and trade rules and investment philosophy system are impacted by the multilateral trade agreements and strong fund forces under the inverse wave of economic globalization; the developed countries will choose in order to realize the expected benefits and some emerging countries or the developing countries to carry out international trade [16], in the international industrial division of labor cooperation, on the basis of both sides to find a benefit balance, on the premise of not damage the interests of their own respective, through investment optimization effect in promoting the benign development of the enterprise. For example, Argentina from the Americas, Myanmar, and Laos in Asia, Rwanda, Nigeria, and other developing countries in Africa are likely to benefit from the new pattern of international industry created by counter economic globalization. This has forced multinationals to rethink their overseas development strategies and consider locating more of their manufacturing in their home countries. As a major manufacturing country in the world, China has incomparable manufacturing advantages. This is due to the fact that developed countries have transferred the middle and low-end manufacturing and processing parts of the industrial chain to China. Chinese enterprises engaged in labor-intensive industries are facing severe external environmental impact in their overseas investment.As can be seen from the data in Figure7, the index of new orders from overseas showed a trend of fluctuation from 2016 to 2018, with a large variation range. This shows that the overseas investment environment is unstable and influenced by too many restrictive factors, which affect the investment environment of Chinese enterprises.Figure 7
Index of new orders from overseas from 2016 to 2018.


#### 4.2.2. External Pressure from Developed Countries and the Disappearance of Demographic Dividend Make the Living Environment of Enterprises Deteriorate

Against the backdrop of frequent economic cooperation and exchanges in the world, developing countries with a weak industrial base have optimized and upgraded their industrial structure, raised the overall level of industrialization, and significantly enhanced their economic strength in the process of taking over industries from developed countries. The deviation in the understanding of economic globalization between developed and developing countries makes people doubt to varying degrees the world multilateral trade and investment rules and governance system with WTO as the core, and the inherent international economic pattern appears to be difficult to support in isolation under the impact of antiglobalization and is facing collapse at any time [17]. Against this backdrop, many overseas companies from the US, Germany, Japan, France, and other countries have withdrawn from China in recent years. This reveals a kind of information: developed countries will target the emerging market countries that can undertake the international industrial gradient transfer and begin to reconstruct their global industrial value chain. In addition, some developing countries located in the southern part of South America and Southeast Asia are sending signals to developed country TNCs to seek cooperation, relying on their advantages of lower cost land and labor than developed countries. And these countries have also launched a series of policies and measures to attract outward investments, which are expected to absorb foreign investments brought by the new counter-globalization features, thus integrating them into the global value chains of MNCs. Therefore, Chinese enterprises in the industrial chain are still under the threat of Western MNCs taking advantage of this opportunity to reduce the order offer of OEM (OEM) enterprises in China, which will make Chinese enterprises face a dilemma: either accept the MNCs’ price reduction or face the situation that long orders become short orders, empty orders become no orders, and eventually regret their exit from the wave of economic globalization.Based on the pressure of multinational companies to significantly reduce external prices, OEMs from China must adopt a strategy to reduce internal production costs if they want to continue production. However, the production costs of domestic OEMs have not seen a decline in recent years, but rather a rapid increase, which is related to the rising labor costs in China in recent years. According to the situation of China’s census data, the number of China’s labor force declined for the first time in 2013, and the advantage of demographic dividend as a large population country gradually disappeared, and labor costs entered a rising stage [18]. The number of people over 60 years old and the proportion of the total population in China from 2000 to 2020 are shown in Figure 8.Figure 8
Trend of China’s population over 60 years old, 2000-2020.From the data in Figure8, it can be seen that, in general, the number of people over 60 years of age in China from 2000 to 2020 has been rising and the proportion of the total population has also been climbing. According to the regulations, people over 60 years old can be called retirees, who have basically lost their labor force. If the number of elderly people in a country has a high proportion of the total population, the country tends to have an aging population, which is an important factor affecting the labor cost. Therefore, the labor price of a country should be judged not only by its level of economic development, but also by the severity of its aging population. The number of people over 60 years old in China in 2020 is about 100 million more than in 2000, and the proportion rises from 10% to 16%. These figures indirectly show that the demographic dividend that helped China’s economy take off before the 21st century is gradually fading, and China has entered the stage of population aging. And as labor wages naturally continue to rise, companies are forced to face greater financial pressure.In April 2018, the State Administration of Taxation issued mandatory regulations for a new unified insurance premium collection method to be implemented starting in 2019. The new approach not only standardizes the management of social insurance premium collection but also strengthens the implementation. However, out of the need to protect their own interests, many listed companies have certain problems of omission and underpayment in paying social security premiums to their employees. Now, according to the newly introduced regulations, the above companies have to bear heavier financial pressure than before in terms of labor cost expenses. In addition, most Chinese overseas enterprises and multinational companies are at the low end of the industrial chain of economic globalization. During the production and processing of their products, they inevitably cause pollution and damage to the local environment [19]. Due to the lax regulatory penalties, enterprises often do not have to take responsibility and pay for the damage to the local environment. In 2016, with General Secretary Xi Jinping’s slogan “Green water and green mountains are golden mountains,” environmental management is in full swing. Companies can no longer ignore the damage to the environment, and the cost of environmental protection and treatment has become a part of the company’s production costs, which have increased by a considerable amount, and in addition, this environmental management work has also driven up the price of industrial raw materials.To sum up, Chinese overseas companies and enterprises are not only facing the loss of price advantage due to the exclusion of developed countries, but also the rising production costs are putting pressure on their assets. The shear difference caused by the superposition of the two forces has caused the profit margin of Chinese enterprises to be continuously compressed, the investment environment of enterprises has been deteriorating, and the total scale of foreign investment has been shrinking.


#### 4.2.3. The Deterioration of Foreign Investment Environment Has Restricted the Investment of Enterprises

In recent years, according to the analysis report on global investment environment released by the World Institute of Politics and Economics, the investment environment in general is in a state of continuous deterioration globally, and the investment risk factor is growing. In 2021, total global cross-border direct investment will be $1.58 trillion, a decrease of 1.5% from 2020. The total global cross-border direct investment in 2020 has also decreased compared to 2019, and the total global cross-border investment has been in decline in the past three years. This situation is particularly evident in developed countries, where total investment by other countries in developed countries in 2020 set a five-year historical low, decreasing by 8% from 2019 compared to 2019. The decline in the level of the EU’s ability to attract foreign investment is particularly pronounced. In 2021, investment in the EU by other countries and economies declined by 13% compared to 2020 and even more by 19% compared to 2019.According to the WTO, among the three major industries, services were the largest decliners in global cross-border M&A, with a 42% decline, followed by industry with a decline of about 18%. The decline in the total amount of mergers and acquisitions makes the inevitable product of the decline in the overall scale of cross-border investment and further indicates that the foreign investment environment is in a deteriorating state under the state of reverse globalization. The reasons for the deterioration of foreign investment environment are inseparable from the global spread of the epidemic. In the past two years, the epidemic has had a serious impact on the global political landscape and economic and financial environment, and the economic development prospects of various countries are facing various uncertainties. In order to strengthen the control of the epidemic, countries have introduced a series of mandatory measures to restrict the movement of people within and outside their borders, ensuring their national security and personal safety of their citizens, while also restricting cross-border investment activities. Under the influence of the epidemic, the projects that have been invested in cannot be started normally and smoothly, which directly affects the real income of the projects and indirectly affects the expected income in the future. The decline in expected returns will have an impact on the projects that TNCs now hold and plan to invest in the future, which in turn will have an impact on reinvestment, with the end result being a decline in the level of global cross-border investment.In addition, the deterioration of the international investment environment caused by the epidemic is not only limited to the decline in the level of global cross-border investment, but also has an impact on the political environment, making the friction and conflict between major countries more frequent. Since the economy is the basis of international relations, the deterioration of the political environment will inevitably have an impact on the economy and trigger trade wars between countries and regions. In particular, economic and trade friction existed between China and the US before the outbreak, and the outbreak of the epidemic will only exacerbate this level of friction, thus rising to a new level. The epidemic has had varying degrees of impact on the level of economic development of countries around the world. With domestic prevention and control measures in place, the epidemic was better controlled and various economic activities were able to start smoothly, with the economy gradually recovering to its original level. However, the outbreak in the US followed, and the effectiveness of the US-China trade agreement was in a state of uncertainty. Although the epidemic did not have a direct impact on the current cross-border trade between the US and China, the possibility of the US side provoking a bigger trade dispute in the future in order to transfer its own financial crisis cannot be ruled out. Previously, the US and Europe had a frictional conflict over the epidemic [20]. President Trump announced a 30-day travel ban on Europe without consulting European countries on the grounds of stopping the epidemic in the United States. The European side said that the US act is “hegemonic and unilateral” and protested against this act. In addition, the trade conflict between the US and Europe has not come to a successful conclusion. Airbus and Boeing, as the world’s two leading aviation companies, have always been in competition with each other and are inevitably in conflict with each other in terms of market occupation. The “digital service tax” has been a big issue, and no reasonable and effective solution has been found so far.In short, the international investment environment has been deteriorating in recent years, and the investment activities of outward-oriented enterprises in this environment are seriously constrained.


## 4.1. Statistical Analysis of Information Disclosure Appraisal Results

By using the financing constraint model, the results of information disclosure appraisal are obtained as shown in Table2.Table 2
Results of information disclosure assessment.
YearExcellentGoodQualifiedFailedTotalNumber of companiesProportionNumber of companiesProportionNumber of companiesProportionNumber of companiesProportion2017509.31%30456.61%14727.37%366.70%5372018559.30%31653.47%18931.98%315.25%5912019649.03%37552.89%24334.27%273.81%70920208210.57%46860.31%20826.81%182.32%77620219611.59%57168.96%14517.51%161.93%828A combined34710.08%203459.11%93227.09%1283.72%3441The data in the table showed the overall quality preference of information disclosure of listed companies from 2017 to 2021. The number of qualified or above companies accounted for 96.28% of the total number of companies, among which the number of companies with good information disclosure quality accounted for 59.11%, and the number of excellent companies accounted for 10.08%. From the overall change trend of time, the quality of information disclosure of the company shows a trend of improvement year by year. The proportion of unqualified companies in information disclosure is decreasing year by year, from 6.70% in 2017 to 1.93% in 2021. The number of companies with good information disclosure quality is on the rise. The number of companies with excellent information disclosure quality also increased from 56.61% in 2017 to 68.96% in 2021. The number of companies with excellent information disclosure quality also increased from 9.31% in 2017 to 11.59% in 2021.The trend chart of information disclosure evaluation results is shown in Figure6.Figure 6
Trend chart of information disclosure evaluation results of listed companies from 2017 to 2021.


## 4.2. The Dilemma of Enterprise Investment in the Antiglobalization Tide

### 4.2.1. Enterprise Safety Margin Reduction

In recent years, global trade and investment rules under the WTO have not changed significantly despite the maneuvering of various parties and multiple rounds of negotiations. Therefore, multilateral trade rules in the international economy are impacted by bilateral free trade negotiations in a smaller scope between the two countries, rather than bilateral or multilateral trade rules in a larger scope, which can be regarded as the practical outcome of the antieconomic globalization wave [15]. In 2017, US President Donald Trump called for the reestablishment of multilateral trade agreements. In his view, the US must withdraw from existing multilateral trade agreements and negotiate new ones with UN member states.Based on the change of the international social environment, economic globalization also presents new characteristics; under these characteristics, free trade, trade protectionism, all sorts of unilateralism, and nationalism raged; the world economic and trade rules and investment philosophy system are impacted by the multilateral trade agreements and strong fund forces under the inverse wave of economic globalization; the developed countries will choose in order to realize the expected benefits and some emerging countries or the developing countries to carry out international trade [16], in the international industrial division of labor cooperation, on the basis of both sides to find a benefit balance, on the premise of not damage the interests of their own respective, through investment optimization effect in promoting the benign development of the enterprise. For example, Argentina from the Americas, Myanmar, and Laos in Asia, Rwanda, Nigeria, and other developing countries in Africa are likely to benefit from the new pattern of international industry created by counter economic globalization. This has forced multinationals to rethink their overseas development strategies and consider locating more of their manufacturing in their home countries. As a major manufacturing country in the world, China has incomparable manufacturing advantages. This is due to the fact that developed countries have transferred the middle and low-end manufacturing and processing parts of the industrial chain to China. Chinese enterprises engaged in labor-intensive industries are facing severe external environmental impact in their overseas investment.As can be seen from the data in Figure7, the index of new orders from overseas showed a trend of fluctuation from 2016 to 2018, with a large variation range. This shows that the overseas investment environment is unstable and influenced by too many restrictive factors, which affect the investment environment of Chinese enterprises.Figure 7
Index of new orders from overseas from 2016 to 2018.


### 4.2.2. External Pressure from Developed Countries and the Disappearance of Demographic Dividend Make the Living Environment of Enterprises Deteriorate

Against the backdrop of frequent economic cooperation and exchanges in the world, developing countries with a weak industrial base have optimized and upgraded their industrial structure, raised the overall level of industrialization, and significantly enhanced their economic strength in the process of taking over industries from developed countries. The deviation in the understanding of economic globalization between developed and developing countries makes people doubt to varying degrees the world multilateral trade and investment rules and governance system with WTO as the core, and the inherent international economic pattern appears to be difficult to support in isolation under the impact of antiglobalization and is facing collapse at any time [17]. Against this backdrop, many overseas companies from the US, Germany, Japan, France, and other countries have withdrawn from China in recent years. This reveals a kind of information: developed countries will target the emerging market countries that can undertake the international industrial gradient transfer and begin to reconstruct their global industrial value chain. In addition, some developing countries located in the southern part of South America and Southeast Asia are sending signals to developed country TNCs to seek cooperation, relying on their advantages of lower cost land and labor than developed countries. And these countries have also launched a series of policies and measures to attract outward investments, which are expected to absorb foreign investments brought by the new counter-globalization features, thus integrating them into the global value chains of MNCs. Therefore, Chinese enterprises in the industrial chain are still under the threat of Western MNCs taking advantage of this opportunity to reduce the order offer of OEM (OEM) enterprises in China, which will make Chinese enterprises face a dilemma: either accept the MNCs’ price reduction or face the situation that long orders become short orders, empty orders become no orders, and eventually regret their exit from the wave of economic globalization.Based on the pressure of multinational companies to significantly reduce external prices, OEMs from China must adopt a strategy to reduce internal production costs if they want to continue production. However, the production costs of domestic OEMs have not seen a decline in recent years, but rather a rapid increase, which is related to the rising labor costs in China in recent years. According to the situation of China’s census data, the number of China’s labor force declined for the first time in 2013, and the advantage of demographic dividend as a large population country gradually disappeared, and labor costs entered a rising stage [18]. The number of people over 60 years old and the proportion of the total population in China from 2000 to 2020 are shown in Figure 8.Figure 8
Trend of China’s population over 60 years old, 2000-2020.From the data in Figure8, it can be seen that, in general, the number of people over 60 years of age in China from 2000 to 2020 has been rising and the proportion of the total population has also been climbing. According to the regulations, people over 60 years old can be called retirees, who have basically lost their labor force. If the number of elderly people in a country has a high proportion of the total population, the country tends to have an aging population, which is an important factor affecting the labor cost. Therefore, the labor price of a country should be judged not only by its level of economic development, but also by the severity of its aging population. The number of people over 60 years old in China in 2020 is about 100 million more than in 2000, and the proportion rises from 10% to 16%. These figures indirectly show that the demographic dividend that helped China’s economy take off before the 21st century is gradually fading, and China has entered the stage of population aging. And as labor wages naturally continue to rise, companies are forced to face greater financial pressure.In April 2018, the State Administration of Taxation issued mandatory regulations for a new unified insurance premium collection method to be implemented starting in 2019. The new approach not only standardizes the management of social insurance premium collection but also strengthens the implementation. However, out of the need to protect their own interests, many listed companies have certain problems of omission and underpayment in paying social security premiums to their employees. Now, according to the newly introduced regulations, the above companies have to bear heavier financial pressure than before in terms of labor cost expenses. In addition, most Chinese overseas enterprises and multinational companies are at the low end of the industrial chain of economic globalization. During the production and processing of their products, they inevitably cause pollution and damage to the local environment [19]. Due to the lax regulatory penalties, enterprises often do not have to take responsibility and pay for the damage to the local environment. In 2016, with General Secretary Xi Jinping’s slogan “Green water and green mountains are golden mountains,” environmental management is in full swing. Companies can no longer ignore the damage to the environment, and the cost of environmental protection and treatment has become a part of the company’s production costs, which have increased by a considerable amount, and in addition, this environmental management work has also driven up the price of industrial raw materials.To sum up, Chinese overseas companies and enterprises are not only facing the loss of price advantage due to the exclusion of developed countries, but also the rising production costs are putting pressure on their assets. The shear difference caused by the superposition of the two forces has caused the profit margin of Chinese enterprises to be continuously compressed, the investment environment of enterprises has been deteriorating, and the total scale of foreign investment has been shrinking.


### 4.2.3. The Deterioration of Foreign Investment Environment Has Restricted the Investment of Enterprises

In recent years, according to the analysis report on global investment environment released by the World Institute of Politics and Economics, the investment environment in general is in a state of continuous deterioration globally, and the investment risk factor is growing. In 2021, total global cross-border direct investment will be $1.58 trillion, a decrease of 1.5% from 2020. The total global cross-border direct investment in 2020 has also decreased compared to 2019, and the total global cross-border investment has been in decline in the past three years. This situation is particularly evident in developed countries, where total investment by other countries in developed countries in 2020 set a five-year historical low, decreasing by 8% from 2019 compared to 2019. The decline in the level of the EU’s ability to attract foreign investment is particularly pronounced. In 2021, investment in the EU by other countries and economies declined by 13% compared to 2020 and even more by 19% compared to 2019.According to the WTO, among the three major industries, services were the largest decliners in global cross-border M&A, with a 42% decline, followed by industry with a decline of about 18%. The decline in the total amount of mergers and acquisitions makes the inevitable product of the decline in the overall scale of cross-border investment and further indicates that the foreign investment environment is in a deteriorating state under the state of reverse globalization. The reasons for the deterioration of foreign investment environment are inseparable from the global spread of the epidemic. In the past two years, the epidemic has had a serious impact on the global political landscape and economic and financial environment, and the economic development prospects of various countries are facing various uncertainties. In order to strengthen the control of the epidemic, countries have introduced a series of mandatory measures to restrict the movement of people within and outside their borders, ensuring their national security and personal safety of their citizens, while also restricting cross-border investment activities. Under the influence of the epidemic, the projects that have been invested in cannot be started normally and smoothly, which directly affects the real income of the projects and indirectly affects the expected income in the future. The decline in expected returns will have an impact on the projects that TNCs now hold and plan to invest in the future, which in turn will have an impact on reinvestment, with the end result being a decline in the level of global cross-border investment.In addition, the deterioration of the international investment environment caused by the epidemic is not only limited to the decline in the level of global cross-border investment, but also has an impact on the political environment, making the friction and conflict between major countries more frequent. Since the economy is the basis of international relations, the deterioration of the political environment will inevitably have an impact on the economy and trigger trade wars between countries and regions. In particular, economic and trade friction existed between China and the US before the outbreak, and the outbreak of the epidemic will only exacerbate this level of friction, thus rising to a new level. The epidemic has had varying degrees of impact on the level of economic development of countries around the world. With domestic prevention and control measures in place, the epidemic was better controlled and various economic activities were able to start smoothly, with the economy gradually recovering to its original level. However, the outbreak in the US followed, and the effectiveness of the US-China trade agreement was in a state of uncertainty. Although the epidemic did not have a direct impact on the current cross-border trade between the US and China, the possibility of the US side provoking a bigger trade dispute in the future in order to transfer its own financial crisis cannot be ruled out. Previously, the US and Europe had a frictional conflict over the epidemic [20]. President Trump announced a 30-day travel ban on Europe without consulting European countries on the grounds of stopping the epidemic in the United States. The European side said that the US act is “hegemonic and unilateral” and protested against this act. In addition, the trade conflict between the US and Europe has not come to a successful conclusion. Airbus and Boeing, as the world’s two leading aviation companies, have always been in competition with each other and are inevitably in conflict with each other in terms of market occupation. The “digital service tax” has been a big issue, and no reasonable and effective solution has been found so far.In short, the international investment environment has been deteriorating in recent years, and the investment activities of outward-oriented enterprises in this environment are seriously constrained.


## 4.2.1. Enterprise Safety Margin Reduction

In recent years, global trade and investment rules under the WTO have not changed significantly despite the maneuvering of various parties and multiple rounds of negotiations. Therefore, multilateral trade rules in the international economy are impacted by bilateral free trade negotiations in a smaller scope between the two countries, rather than bilateral or multilateral trade rules in a larger scope, which can be regarded as the practical outcome of the antieconomic globalization wave [15]. In 2017, US President Donald Trump called for the reestablishment of multilateral trade agreements. In his view, the US must withdraw from existing multilateral trade agreements and negotiate new ones with UN member states.Based on the change of the international social environment, economic globalization also presents new characteristics; under these characteristics, free trade, trade protectionism, all sorts of unilateralism, and nationalism raged; the world economic and trade rules and investment philosophy system are impacted by the multilateral trade agreements and strong fund forces under the inverse wave of economic globalization; the developed countries will choose in order to realize the expected benefits and some emerging countries or the developing countries to carry out international trade [16], in the international industrial division of labor cooperation, on the basis of both sides to find a benefit balance, on the premise of not damage the interests of their own respective, through investment optimization effect in promoting the benign development of the enterprise. For example, Argentina from the Americas, Myanmar, and Laos in Asia, Rwanda, Nigeria, and other developing countries in Africa are likely to benefit from the new pattern of international industry created by counter economic globalization. This has forced multinationals to rethink their overseas development strategies and consider locating more of their manufacturing in their home countries. As a major manufacturing country in the world, China has incomparable manufacturing advantages. This is due to the fact that developed countries have transferred the middle and low-end manufacturing and processing parts of the industrial chain to China. Chinese enterprises engaged in labor-intensive industries are facing severe external environmental impact in their overseas investment.As can be seen from the data in Figure7, the index of new orders from overseas showed a trend of fluctuation from 2016 to 2018, with a large variation range. This shows that the overseas investment environment is unstable and influenced by too many restrictive factors, which affect the investment environment of Chinese enterprises.Figure 7
Index of new orders from overseas from 2016 to 2018.


## 4.2.2. External Pressure from Developed Countries and the Disappearance of Demographic Dividend Make the Living Environment of Enterprises Deteriorate

Against the backdrop of frequent economic cooperation and exchanges in the world, developing countries with a weak industrial base have optimized and upgraded their industrial structure, raised the overall level of industrialization, and significantly enhanced their economic strength in the process of taking over industries from developed countries. The deviation in the understanding of economic globalization between developed and developing countries makes people doubt to varying degrees the world multilateral trade and investment rules and governance system with WTO as the core, and the inherent international economic pattern appears to be difficult to support in isolation under the impact of antiglobalization and is facing collapse at any time [17]. Against this backdrop, many overseas companies from the US, Germany, Japan, France, and other countries have withdrawn from China in recent years. This reveals a kind of information: developed countries will target the emerging market countries that can undertake the international industrial gradient transfer and begin to reconstruct their global industrial value chain. In addition, some developing countries located in the southern part of South America and Southeast Asia are sending signals to developed country TNCs to seek cooperation, relying on their advantages of lower cost land and labor than developed countries. And these countries have also launched a series of policies and measures to attract outward investments, which are expected to absorb foreign investments brought by the new counter-globalization features, thus integrating them into the global value chains of MNCs. Therefore, Chinese enterprises in the industrial chain are still under the threat of Western MNCs taking advantage of this opportunity to reduce the order offer of OEM (OEM) enterprises in China, which will make Chinese enterprises face a dilemma: either accept the MNCs’ price reduction or face the situation that long orders become short orders, empty orders become no orders, and eventually regret their exit from the wave of economic globalization.Based on the pressure of multinational companies to significantly reduce external prices, OEMs from China must adopt a strategy to reduce internal production costs if they want to continue production. However, the production costs of domestic OEMs have not seen a decline in recent years, but rather a rapid increase, which is related to the rising labor costs in China in recent years. According to the situation of China’s census data, the number of China’s labor force declined for the first time in 2013, and the advantage of demographic dividend as a large population country gradually disappeared, and labor costs entered a rising stage [18]. The number of people over 60 years old and the proportion of the total population in China from 2000 to 2020 are shown in Figure 8.Figure 8
Trend of China’s population over 60 years old, 2000-2020.From the data in Figure8, it can be seen that, in general, the number of people over 60 years of age in China from 2000 to 2020 has been rising and the proportion of the total population has also been climbing. According to the regulations, people over 60 years old can be called retirees, who have basically lost their labor force. If the number of elderly people in a country has a high proportion of the total population, the country tends to have an aging population, which is an important factor affecting the labor cost. Therefore, the labor price of a country should be judged not only by its level of economic development, but also by the severity of its aging population. The number of people over 60 years old in China in 2020 is about 100 million more than in 2000, and the proportion rises from 10% to 16%. These figures indirectly show that the demographic dividend that helped China’s economy take off before the 21st century is gradually fading, and China has entered the stage of population aging. And as labor wages naturally continue to rise, companies are forced to face greater financial pressure.In April 2018, the State Administration of Taxation issued mandatory regulations for a new unified insurance premium collection method to be implemented starting in 2019. The new approach not only standardizes the management of social insurance premium collection but also strengthens the implementation. However, out of the need to protect their own interests, many listed companies have certain problems of omission and underpayment in paying social security premiums to their employees. Now, according to the newly introduced regulations, the above companies have to bear heavier financial pressure than before in terms of labor cost expenses. In addition, most Chinese overseas enterprises and multinational companies are at the low end of the industrial chain of economic globalization. During the production and processing of their products, they inevitably cause pollution and damage to the local environment [19]. Due to the lax regulatory penalties, enterprises often do not have to take responsibility and pay for the damage to the local environment. In 2016, with General Secretary Xi Jinping’s slogan “Green water and green mountains are golden mountains,” environmental management is in full swing. Companies can no longer ignore the damage to the environment, and the cost of environmental protection and treatment has become a part of the company’s production costs, which have increased by a considerable amount, and in addition, this environmental management work has also driven up the price of industrial raw materials.To sum up, Chinese overseas companies and enterprises are not only facing the loss of price advantage due to the exclusion of developed countries, but also the rising production costs are putting pressure on their assets. The shear difference caused by the superposition of the two forces has caused the profit margin of Chinese enterprises to be continuously compressed, the investment environment of enterprises has been deteriorating, and the total scale of foreign investment has been shrinking.


## 4.2.3. The Deterioration of Foreign Investment Environment Has Restricted the Investment of Enterprises

In recent years, according to the analysis report on global investment environment released by the World Institute of Politics and Economics, the investment environment in general is in a state of continuous deterioration globally, and the investment risk factor is growing. In 2021, total global cross-border direct investment will be $1.58 trillion, a decrease of 1.5% from 2020. The total global cross-border direct investment in 2020 has also decreased compared to 2019, and the total global cross-border investment has been in decline in the past three years. This situation is particularly evident in developed countries, where total investment by other countries in developed countries in 2020 set a five-year historical low, decreasing by 8% from 2019 compared to 2019. The decline in the level of the EU’s ability to attract foreign investment is particularly pronounced. In 2021, investment in the EU by other countries and economies declined by 13% compared to 2020 and even more by 19% compared to 2019.According to the WTO, among the three major industries, services were the largest decliners in global cross-border M&A, with a 42% decline, followed by industry with a decline of about 18%. The decline in the total amount of mergers and acquisitions makes the inevitable product of the decline in the overall scale of cross-border investment and further indicates that the foreign investment environment is in a deteriorating state under the state of reverse globalization. The reasons for the deterioration of foreign investment environment are inseparable from the global spread of the epidemic. In the past two years, the epidemic has had a serious impact on the global political landscape and economic and financial environment, and the economic development prospects of various countries are facing various uncertainties. In order to strengthen the control of the epidemic, countries have introduced a series of mandatory measures to restrict the movement of people within and outside their borders, ensuring their national security and personal safety of their citizens, while also restricting cross-border investment activities. Under the influence of the epidemic, the projects that have been invested in cannot be started normally and smoothly, which directly affects the real income of the projects and indirectly affects the expected income in the future. The decline in expected returns will have an impact on the projects that TNCs now hold and plan to invest in the future, which in turn will have an impact on reinvestment, with the end result being a decline in the level of global cross-border investment.In addition, the deterioration of the international investment environment caused by the epidemic is not only limited to the decline in the level of global cross-border investment, but also has an impact on the political environment, making the friction and conflict between major countries more frequent. Since the economy is the basis of international relations, the deterioration of the political environment will inevitably have an impact on the economy and trigger trade wars between countries and regions. In particular, economic and trade friction existed between China and the US before the outbreak, and the outbreak of the epidemic will only exacerbate this level of friction, thus rising to a new level. The epidemic has had varying degrees of impact on the level of economic development of countries around the world. With domestic prevention and control measures in place, the epidemic was better controlled and various economic activities were able to start smoothly, with the economy gradually recovering to its original level. However, the outbreak in the US followed, and the effectiveness of the US-China trade agreement was in a state of uncertainty. Although the epidemic did not have a direct impact on the current cross-border trade between the US and China, the possibility of the US side provoking a bigger trade dispute in the future in order to transfer its own financial crisis cannot be ruled out. Previously, the US and Europe had a frictional conflict over the epidemic [20]. President Trump announced a 30-day travel ban on Europe without consulting European countries on the grounds of stopping the epidemic in the United States. The European side said that the US act is “hegemonic and unilateral” and protested against this act. In addition, the trade conflict between the US and Europe has not come to a successful conclusion. Airbus and Boeing, as the world’s two leading aviation companies, have always been in competition with each other and are inevitably in conflict with each other in terms of market occupation. The “digital service tax” has been a big issue, and no reasonable and effective solution has been found so far.In short, the international investment environment has been deteriorating in recent years, and the investment activities of outward-oriented enterprises in this environment are seriously constrained.


## 5. Conclusion

This paper has provided a conceptual explanation of financing constraints and information disclosure and investigated the relationship between them and the degree of mutual influence. Through the selection of information disclosure quality indicators, a financing constraint metric model is introduced in order to expect the results of information disclosure assessment to find a reasonable idea for achieving open and transparent market information. Due to the inherent drawbacks of the market and information asymmetry on the part of financial individuals, there are inevitable cost differences between internal and external financing. Under the frictional effect of cost difference, there is inevitably a financing constraint for enterprises. This constraint cannot be eradicated, but it can be improved.As the wave of counter-globalization continues to expand worldwide, global multilateral trade and investment rules have been greatly impacted. The outward-oriented enterprises in various countries under this wave are facing a series of investment difficulties, which seriously restrict the investment choices and investment plans of outward-oriented enterprises targeting overseas markets. In addition, the deterioration of overseas investment environment also puts such enterprises in a difficult investment situation. All kinds of investment difficulties pose a threat to the healthy development of export-oriented enterprises. In order to escape from the constraints brought by reverse globalization, export-oriented enterprises must find a transformation path that meets their own development characteristics; otherwise, they will only be swallowed by the wave of reverse globalization.In view of the limitation of research time and personal ability, there are still some incompleteness in this paper. The relationship between financing constraints and information disclosure, as well as the investment dilemmas faced by enterprises under the wave of reverse globalization, still has many questions to be further explored and discovered.



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*Source: 7957187-2022-08-21.xml*