How Financial Constraints Affect Corporate Value: A Empirical Study on China Company 1.Introduction As China is making a great reform of its capital market and financial system, which has changed the financial constraints(David J Bryce and Michael Useem, 1998), the approach to assess the company is waiting to innovate. Eliseu Alves et al. (2008) has made a new method to estimate the company value. ..The situation is shown in figure 1. 1.8 1.6 1.4 1.2 1 Coefficients for year dummies 0.8 0.6 0.4 0.2 -Untreated subclass treated subclasses 1915 1920 1925 1930 1935 Figure 1 2. Literature Review Michele Graziano Ceddia et al. (2013) provide a new approach of complex system. Private firm is definitely different from state-owned firms, so the valuation method shall be adjusted to its benchmark (Alfonso A Rojo-Ramrez, 2014)..... However, we can make 3 Hypothesizes: HI: H2: H3: 3. Empirical analysis In order to exploit a new model for China capital market, we have to change the classical model as below: value, - B+B SML, +B_INF + (1) In the equation (1), we denote the firm i, SML as the index INF as the inflation factor, X as the control variables. (1) Data source We get the data from Yahoo finance, the data is described in the table 1. TABLE 1 data description Max Min Mean St.D SML 123.456 12.34 75.13 21.67 INF 123.456 12.34 75.13 21.67 X, 123.456 12.34 75.13 21.67 After regression, we get the table 2 below TABLE 2 Coefficients St.D T-value P-value SML 123.456*** 12.34 75.13 0.0001 INF 123.456** 12.34 2.98 0.002 X 123.456 12.34 1.13 0.14 *** Significant at the 1 percent level. ** Significant at the 5 percent level. * Significant at the 10 percent level. From the result of regression, we can find ...... The H1 is proved. .... 4. Conclusions and Policy implication In this paper, we develop the new model, which maybe contribute to the company valuation method of developing countries