Research On Accounting Information Quality And Inefficiency Investment At The Enterprise Level

Inefficiency investment at the enterprise level severely damaged the interests of the shareholders and the sound development of macro-economy, has been a mainstream in the field of modern corporate finance research. Scholars have discussed the formation mechanism of inefficiency investment at the enterprise level from different perspectives and have brought forward methods to constrain the inefficiency investment of the enterprises from various angles. This paper tries to learn from and push forward the quality of accounting information research, and study mechanism of accounting information quality governing inefficiency investment of the enterprises within the framework of the principal-agent theory and information economics theory. Meanwhile, this paper also tests the relation between accounting information quality and inefficiency investment of the companies on a sample of listed corporations of manufacturing industry in china. The purpose is to provide clues for improving inefficient investment governance.The paper first analyze the condition of enterprise investment efficient as well as accounting information quality in china, then this paper discuss the influence of information asymmetry and principal-agent conflict on behavior of enterprise investment. Final, this paper construct the channel of accounting information quality constraining inefficiency investment at the enterprise level through analysis of role of accounting information quality in capital markets and corporate governance:(1) High quality accounting information can add liquidity of capital markets, reduce risk level of future profit that investor expect, helps investors to make correct asset pricing, thus constrain inefficiency investment at the enterprise level in financing process; (2) High quality accounting information reduce information asymmetric and contractual incompleteness, ensure optimum allocation and effective implementation of corporate control rights, supervise and incentive of the managers, board of directors and staff in enterprise, thus constrain the inefficiency investment behavior of agents who intend to maximize their self-interest.Based on the research in the above, this paper also test the relation between accounting information quality and inefficiency investment of the companies.First, this paper put forward hypothesis, then test these hypothesis on a sample of listed corporations of manufacturing industry in China from 2004 to 2006. The main findings are as follows: High quality of accounting information can reduce the overinvestment of company; High quality of accounting information can reduce the underinvestment of company. Then, this paper test the different effect of accounting information quality governing inefficiency investment of the enterprises. The main findings are as follows:(1) With other conditions unchanged, high quality of accounting information will reduce more the overinvestment of the listed companies with high free cash flow; With other conditions unchanged, high quality of accounting information will reduce more the underinvestment of the listed companies with more serious financial constraint; (2) With other conditions unchanged, high quality of accounting information will reduce more the overinvestment of the listed companies in higher level of legal areas; With other conditions unchanged, high quality of accounting information will reduce more the underinvestment of the listed companies in lower level of financial development areas.