Abstract: Taking the listed companies on the SME Board as the research subject, this paper conducts an empirical test on the sensitivity of investment-cash flow before and after their listing on the board. The study finds out that before and after their listing, all the corporate investments have higher sensitivity on the internal cash flow, and the sensitivity after listing is significantly higher than that before listing. Through further study of the impact of cash holdings on the investment-cash flow sensitivity, it is found that the reason why the corporate investment after listing has higher sensitivity over the investment-cash flow is that after going public, the enterprises are faced with stronger financing constraints, rather than their overinvestment behaviors.

Key words: SME Board; financing constraints; overinvestment; investment efficiency