| Abstract | The research on investment-cash flow sensitivity is one of the main topics in investment theory research. At present, the hottest debate is how to measure the financial constraint and what’s the relationship between financial constraint and cash-flow sensitivity. We use PIN, which is a direct measurement for information asymmetry based on microstructure theory calculated by using high-frequency data from capital market, as the measurement of financial constraint. The analysis prove that the higher the information asymmetry, the lower firm investment. Further, we also find the higher the information asymmetry, the higher investment-cash flow sensitivity, namely higher financial constraint would bring higher investment-cash flow sensitivity. We also exam the monotonicity between investment-cash flow sensitivity and financial constraint and the result shows that an unmonotonicity relationship between financial constraint and investment-cash flow sensitivity. |