Over-investment Studies Of State-holding Listed Companies

With the continued growth of domestic investment in fixed asset, Micro-level enterprises "over-investment" problem has become the focus of attention of management and academic problems. The so-called "over-investment" refers that a company Invests in negative net present value of the non-profit project regardless of its own capabilities and growth opportunities, Leading to decline in enterprise value (Jensen,1976).It is agency problems that leads to over-investment enterprises(Jensen,1976,1986). Corporate governance is to solve the agency problems and Contract incompleteness. Good corporate governance can be effectively constrained managers to pursue self-interest of "moral hazard" behavior (Hart,1995; Ghose,2005;Philippon,2005).It is a corollary that the author reserchs over-investment problem from the perspective of corporate governance, to reveal Enterprise over-investment behavior of the microscopic mechanism.Studying over-investment study is important, While systematic research is still rare to date, only exploring a Characteristics of Corporations or institutions of factors on the impact of over-investment, Lacking of rigorous empirical research methods and comprehensive examination of evidence.Basing on the background of China and the market environment, The author proposeing fistly a Analysis Framework of studying the problem of over-investment on perspective of corporate governance. And in this framework, the author Analysis mechanism of Various governance mechanisms Affecting over-investment. To China's state-owned listed companies as samples, the author tests the corporate governance of state-owned listed companies in over-investment problems from micro, meso and macro levels.The results show:(1) Ownership concentration and over-investment in U-shaped relationship; Equity balance and independent Director do not play an active role in over-investment. One of two staff significantly increased the degree of over-investment in listed companies. Low pay is One of the reasons to cause excessive investment manager. Bank debt increased significantly level of over investment of state-owned listed companies.On product market competition and over-investment relations, Weaker product market competition, Over-investment of state-owned listed companies if more serious. External competition and internal oversight mechanisms have had some interaction between the effects. Competitive pressures in external markets weakened the motivation of the majority shareholder of the conspiracy, and enhanced the oversight function of independent directors and bank loans.Also it is an important factor the external institutional environment impacts over-investment. The author found that the more government intervention, the more serious over-investment. And improving the rule of law will significantly reduce the level of over-investment companies.