Study On Company Governance, Investment Efficiency And Financial Pefrormance Measurement And Their Relationship

In the past few years, when research on company administration on thetheoretical circle and practice circle is deepening increasingly, research on companyeconomic results has deepens day by day. Company administration refers to a wholeset of system arrangement on the supervision and control of the owner on theoperation management and performance of an enterprise（Lin Yifu，1997）. No matterin large enterprise groups or small and medium enterprises, the companyadministration level not only influences the personal benefits of each stakeholder inthe enterprise, but also affects the long-term development of the enterprise. It can beseen that in modern enterprise management system, company administration makesthe key function. Therefore, maintaining the higher company administration level isthe key to obtain competitive advantages for enterprises. The higher companyadministration level can effectively improve the company investing efficiency, whichshows its direct influences on the investing decision of the enterprise. At the sametime, as one of three great operating activities of the enterprise, investment activityalso directly influences enterprise operating effects（or enterprise performance）.Inmicroscopic analysis, effective investment for improving enterprise performance isthe key foundation of main driver and creation of company values. And investingdecision is also one of the most important financial decisions. In macroscopic analysis,investment develops the important function of “pulling the carriage” in “threecarriages” pulling economic increases and effective investment is the economicfactory of promoting economic increases and attracting social consumptions. Formicroscopic enterprise investments form macroscopic investments, good enterpriseinvestment develops the very important function on the economic development,which is the main driving force of our domestic economic increases.However, based on literature research, currently, it discovers that research oncompany administration mainly focuses on the definition of company administrationconcept and research on the evaluation system of company administration level indexand its administration results and makes I difficult to provide systematicrecommendations and references for the practice circle in improving the company administration, leading that company administrative measures are systematic enoughand the implementation effect is not optimal. At the same time, most our domesticlisted companies have problems of excessive investments or insufficient investments,investing efficiencies are commonly not high. Jiang Fuxiu（2009）. Therefore, howcompany administration influences company investing efficiency so as to influencethe financial performance of the company is the current realistic problem in urgentneed of solutions in our domestic economic development. By searching literature, wecan find that little literature deeply discusses the important topic by the conductivefunction of intermediary variables in the academic circle. Therefore, this paperattempts to discuss the influencing mechanism of company administration onfinancial performance, the influencing mechanism of company administration oninvestments and the influencing mechanism of investing efficiency on financialperformance in the paradigm of company administration—investingefficiency—financial performance. The paper deeply studies the intermediaryfunction of investment efficiency between company administration and financialperformance and what the structural relationship among these three and deepens thecompany administration to influence research on financial performance.The paper initiatively takes literature overview as the basis, combines relatedbasic theories to adopt different methods and models to make single measurements oncompany administration, investment efficiency and financial performance level andpreliminarily determines the research frame of this paper; then in accordance with theinfluencing mechanism among company administration, investment efficiency andfinancial performance, it puts forward corresponding assumptions; At the same time,it constructs the structure equation model on the relationship among companyadministration, investments and financial performances of listed companies, utilizesCSMAR, Wander and Res finance data base to collect large sample data and use thestructure equation model to make empirical research on the relationship among thesethree; Finally, it makes further analysis and discussion on empirical results. Inaddition, the paper also combines our domestic current macroscopic and microscopiceconomic environment to put forward targeted recommendations. The conclusions areobtained in the research as follows:1. It measures the level of corporate governance with AHP from stock rightsstructure, board of directors, manager level, board of supervisors and other fivedimensions. Research results demonstrate that the level of corporate governance is thehighest in the manager level, second in board of directors and lowest in the stockrights structure. That is to say, the stock rights structure of the company is notreasonable, mainly reflecting that the concentration of the structure of corporate stock rights structure is too high, which produces adverse effects on the growth of stockmarkets so as to lower the function of external markets in corporate governance. Forthe situation in our country, it should establish the structure of stock rights with thediversification of investing entities. Only by ensuring the existence of diversifiedinvesting entities can the basic operation of the governance structure by legal personsbe done perfectly and the legal person property of corporate governance can be trulyreflected. However, stock rights stock is not appropriate to be too dispersed, and thecompany needs to scatter the structure of stock rights properly. Numerous practicalresults indicate that stocks rights of some developed countries sometimes appear toodispersed, leading to internal staff control and other problems. But the main problemof internal staff control appeared in some listed companies is that stock rights is tooconcentrated, or the situation that “the single large shareholder” shows in state shares.From this, we can see that the over concentrated and dispersed stock rights structureswill all have effects in the governance performance of companies.2.For the measurement of investing efficiency levels, the paper chooses8invested indexes （main business cost, sales cost, management cost, financial cost,fixed assets net amount, intangible assets net amount, long-term equity investmentsnet amount, employee benefits payable）,5output indexes（main business income,earnings per share, return on equity, tobinq, total assets growth rate）, takes BCCmodel for reference and adopts DEAP2.1to analyze the data. Research resultsdemonstrate that in150companies, efficient and effective years are more, and thecomprehensive efficiency fluctuation ranges are not great from2003to2012,companies with fluctuations occupy smaller proportions, which have no obviousrising or falling trends basically.3. For the measurement of financial performance levels, it takes listedmanufacturing enterprises releasing investment announcements in A share markets ofShanghai and Shenzhen from2010to2012as the initiatively selected sample, adoptsfactor analysis method to evaluate financial performance levels. Results indicate thatin6main factors. The first main factor is the main factor of profitability of listedcompanies, and the variance contribution rate is46.7%; the second main factor isactually the factor of corporate profitability as well, and its variance contribution rateis16.76%, taking the current profitability as the most dominant standard to evaluatethe financial performance of the company; the third main factor is the main factor ofdebt-paying ability of the company, the variance contribution rate is11.86%，and thedebt-paying ability also occupies the important position in the operation of modernenterprises. The fourth, fifth and sixth factor represent the main factor of corporate developing ability, the main factory of corporate operating ability and the main factorof turnover ability of receivable, and their variance contribution rates are9.23%,6.31%and5.25%separately.4. In the end, empirical research results on the relationship of corporategovernance, investing efficiency and financial performance demonstrate that:corporate governance has obvious positive correlation relations, enterprise developingopportunity equips with positive correlation relations with solvency, profitability andoperating ability; corporate governance has obvious positive correlation relations withfinancial performance, among which stock rights structure has obvious positivecorrelation relations with financial performance, but the influencing relationship ofstock rights structure, profitability and solvency has not passed the significance test;characteristics of board of directors has obvious positive correlation relations withfinancial performance, but the influencing relation between characteristics of board ofdirectors and operating ability has not passed the test significantly; characteristics ofsenior managers have positive correlation relations with financial performance, butthe influencing relationship between characteristics of senior managers andprofitability has not passed the test significantly.Innovative points of this research are mainly in the following three aspects:Firstly, it takes the research example of“system→behavior→result”as thefoundation, clarifies the internal mechanism of corporate governance, investingefficiency and financial performance, applies structural equation model to test theproposed assumptions and makes up the defects of the unsystematic theoreticalresearch and insufficient empirical research in the field.Secondly, the paper firstly introduces enterprise developing opportunity and newadded investing opportunity as intermediary variables, analyzes the effects ofcorporate governance on financial performance, searches for the interactiverelationship between corporate governance and financial performance and investingefficiency and financial performance so as to providing a new idea in improving theinvesting efficiency and financial performance in our domestic listed companies.Thirdly, on the foundation of existing literature, it creatively involves threeparties of corporate governance, investing efficiency and financial performance intothe united analytic framework, explores the interactive influencing relationship amongthree and enriches the content of field research.