| Investment is the major cause of company growth and the base of future growth of cash flow. Investment influences directly to a series of company financial policy such as the operational risk, earnings, financing policy and dividend assignment. And In practice, investment decision is always the logical start point of formulating company's financial policy. From MM theory which was put forward by Modigliani and Miller (1958), many studies began to relax the neo-classical assumption of MM theorem gradually, to modify the application scope of"irrelevancy"proposition and in realistic conditions, to incorporate the company's governance mechanism with its investment behaviors into a unified frame. Financing restrain and angency conflict are the most important governance mechanisms outside and inside companies, respectively. Their influence on the investment behaviors of companies is always the important issue of corporate finance studies.The special systematic background of domestic capital market determines a series of problems in ownership structure and corporate governance of domestic listed companies. In the background of economic transition, the effects of the highly concentrated ownership structure, the special character of ownership and the diversity of allocation model of control on the investment behaviors of listed companies are yet to be studied intensively. This thesis is based on the systematic study on the character of ownership and allocation model of control of domestic listed companies. In the sight of"the second agent problem"and the heterogeneity of ownership, by starting at the production and allocation of private benefits of control and ending at inefficient corporate investment behaviors, connecting with the character of ownership and allocation model of control, combining agent-conflict-induced over-investment and financial-restrain-induced investment-deficiency into one unified framework, we intensively discuss the relationship between corporate agent conflict, financial restrain and inefficient investment behaviors. Thus improve our understanding the cause, the influence and the formation mechanism of inefficient investment behaviors, such as over-investment and investment-deficiency, of domestic listed companies. By comparing financial decision-making efficiency of listed companies with various kinds of character of ownership and allocation model of control, we give some valuable policy recommendation on improving the governance efficiency of domestic listed companies, deepening reform of state-owned enterprises and completing investor protection system. The concrete contents are as follows:Chapter 1 is introduction, which gives the motive, the object, the value, the content, the characteristics and the innovation of our research. The definition of key concepts involved in the paper is given.Chapter 2 gives an theoretical review. According to the development of the theory of corporate investment, we briefly review the traditional theory of corporate investment under the neo-classical framework, then by starting at the irrelevant proposition we discuss the modern theory of corporate investment under the framework of corporate governance, lastly we focus on discussing and evaluating the theoretical studies on the corporate investment behaviors in the sight of private benefit of control.Chapter 3 introduces the regulation background of the investment system of domestic listed companies. Under the background of the economic transition, we discuss the evolution of the investment and financial system, the market environment and law system of investment decision of domestic listed companies and the operational mechanism of the investment decision of domestic listed companies, which foreshadow our theoretical and practice research.Chapter 4 analyzes the financial restrain, agent conflict and corporate inefficient investment behaviors in the sight of private benefit of control. Based on the assumption of heterogeneous ownership, we set up a model to analyze the relationship between the financial restrain, agent conflict and corporate investment behavior under various kinds of allocation of firm's control right. Our model is based on the classical model of Myer and Majluf (1984), adding a parameter of private benefit of control right, and modifying original assumption based on"the second agent conflict", we discuss the relationship between the private benefit of control right and the corporate inefficient investment behavior, and analyze the effects of financial restrain and agent conflict under various kinds of allocation of control right and ownership structure. It is shown that:(1) in the model of ownership centralism, both over-investment and investment-deficiency are resulted from the major shareholder's pursuit of private benefit of control right. The two inefficient investment behaviors share the common cause and both exist in the corporate investment behaviors. Bonding with specific ownership structures and allocation models of control right, they are joint together. (2) The distortion degree of inefficient investment behaviors vary with the agent conflict degree represented by ratio of the ownership of controlling stake and the financial restrain degree represented by financing cost. By the action of the convergence of interest effect, the degree of over-investment is inversely correlated with the share ratio of controlling stake. While by the action of the financial restrain, investment is positively correlated with financing cost. (3) The efficiency of corporate investment depends on the allocation models of control right. Comparing to the monopoly controlling ownership, in the case of ownership of multiple large shareholders both balancing and cooperation could alleviate the over-investment and aggravate the investment-deficiency. Although both balancing and cooperation between several large shareholders result in the same consequences, the reasons and inner mechanisms, however, are different. The former is based on exogenous factor supervising cost, while the latter is based on endogenous factor cooperating cost.Chapter 5 is the empirical analysis on the financial restrain, agent conflict and inefficient investment behavior in the sight of private benefit of control. Following theoretical analysis in previous chapter, we empirically study the inefficient investment problems of domestic listed companies based on the data of Chinese listed companies during 2000-2009. It is shown that the distortion of investment induced by private benefit of control varies with ownership characteristics and company scale. Corporate inefficient investment behaviors are determined by financial restrain and agent conflict which both are induced by private benefit of control. State-owned and non-state-owned listed companies both have high investment-cash flow sensitivity, however, they differ in investment behavior decisions. Taken as a whole, state-owned listed companies shows over-investment behaviors, while non-state-owned listed companies shows investment-deficiency behaviors. Comparing to large-scale companies, small-scale companies have higher investment-cash flow sensitivity and show investment-deficiency behaviors. While large-scale companies shows inefficient investment behaviors represented by over-investment.Chapter 6 is the empirical research on inefficient investment behaviors of domestic listed companies basing in the sight of private benefit of control. Based on the data of Chinese listed companies during 2000-2008, we study the effect of arrangement of control right on the corporate investment behavior in the case of ownership centralism and special ownership property. It is shown that under the condition of large shareholder controlling, corporate investment behaviors show inefficiency and vary with the share ratio of large shareholders, in spite of one majority shareholder controlling or several large shareholders controlling. In the case of one majority shareholder controlling, due to the convergence of interest effect corporate over-investment behaviors would be alleviated with the increase of share ratio of the majority shareholder and is inversely correlated with the ratio of control right. While due to the entrenchment effect, investment-deficiency behaviors would be aggravated with the increase of share ratio of the majority shareholder and is positively correlated with the ratio of control right. In the case of several large shareholders common controlling, the corporate inefficient investment behaviors depend on whether large shareholders balance or cooperate with each other. When large shareholders balance each other, over-investment would be alleviated and investment-deficiency would be aggravated. While when large shareholders cooperated with each other and shareholder alliance forms, over-investment would be aggravated and investment-deficiency would be alleviated.Chapter 7 is policy recommendation. According to the above discussion, we give some purpose-aimed suggestions concerning to the problems in investment decisions of domestic listed companies.
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