Risk Mechanism and Architecture of Investment and Financing Based on DEA-Malmquist Index

Abstract

After the outbreak of the epidemic, the external environment has changed, affecting social and economic development. In the unfavorable economic and social environment, the behavior of many businesses and consumers has also changed. Therefore, companies do not have enough income and expenditure, which leads to the breakage of their capital chain or even bankruptcy. As a result, proper financing has been critical for many businesses in the near term. Today, listed companies are mainly financed from internal financing, equity, and debt. Generally speaking, most companies prefer debt financing because equity financing costs can be deducted before taxes and investment costs are lower than equity financing. Enterprises face certain risks when choosing debt financing; in addition, they also face the risk of future repayment. This paper adopts the research method of DEA-Malmquist index for analysis, which can effectively help enterprises avoid or reduce the risk of debt financing and is worthy of in-depth research and exploration by entrepreneurs and scholars.