Research On The Investment Efficiency Of Diversified Ownership Enterprises Under Macroeconomic Fluctuation

With the rapid growth of socialist market economy and the steady reform of state-owned enterprise in China, a lot of private capitals and foreign capitals are devoted into the restructuring process of state-owned enterprises. The alliance of state-owned capital, private capital, foreign capital and other non-state-owned capital promotes the mutual penetration and integration of individual economy, private economy and public ownership economy. The diversified property rights systems, as the representative of mixed ownership system, gradually replaced the original single public ownership system. One aspect of the performance is the positive cooperation between state-owned enterprises and foreign investments that from Hong Kong, Macao and Taiwan-funded enterprises. The other aspect of the performance is the mutual penetration and integration of national assets, the collective assets and private assets. This provides an impetus to the mixed-ownership economy development, in which the public ownership is dominant and diverse forms of ownership economy develop together. The experience of the reform and opening-up proves that actively guides and vigorously promotes the development of diversified ownership enterprises is an inevitable trend in the development of enterprise ownership system in China. One tough issue for the current research is how to prevent the infringement of the lawful rights and interests of state-owned property right via overall planning and effectively adopting scientific business models and modern administrative methods. Recent researches on diversified ownership enterprises hardly tapped the fields of investment behavior and investment efficiency. However, the investment efficiency will utmost influence the realization of the rights and interests of diversified shareholders, especially for the realization of the rights and interests state-owned shareholders. The paper explores the investment efficiency and influencing factors of China's diversified ownership enterprises from both the theoretical and empirical perspectives, in order to provide some directions for the promotion of their development, guiding their capital flow and reinforcement of their actual capital utilization efficiency.Firstly, the paper analyzes the characteristics of investment expenditure and the influential factors of investment efficiency. The investment expenditures of diversified ownership enterprises, including expenditures of long-term investments, intangible assets investments, fixed assets investment, are analyzed from the perspectives of basic, industrial, major shareholders' and scale characteristics. The results derive a significant difference between investment expenditures and specific expenditure categories of different diversified ownership enterprise samples. Furthermore, the influential factors of investment efficiency are analyzed from both micro and macro perspectives. Macro factors include macroeconomic environment and macroeconomic policy. The macroeconomic environment factors include gross domestic product (GDP), inflation rate, unemployment rate, etc., while the macroeconomic policy factors include fiscal policy and monetary policy. Micro factors include corporate governance, financing channels, asset characteristics and product markets etc. Among them, the enterprise governance factors include shareholder governance (large shareholder control, equity restriction ratio, state-owned equity ratio, proportion of liquid shares), the board of directors and management layer (board size, the scale of the independent directors, shareholding ratio of chairman, executive compensation, shareholding ratio of management layer), the scale of supervisory board etc.; the financing channels include internal financing, equity financing, long-term debt financing and short-term debt financing; the equity financing includes cash flow liquidity, amount of cash holdings, cash flow generated from operating activities and profit distribution; products market factors include business risks, market competitiveness and diversified investments.Secondly, the paper analyzes the relationship between macroeconomic fluctuation and enterprise investment behavior. The paper measures the macroeconomic fluctuation, examines the correlation between macroeconomic volatility and macroeconomic environment variables and macroeconomic policy variables, and then generally analyzes the relationship between macroeconomic fluctuation and enterprise investment, which is, the impact of macroeconomic factors on enterprise behaviors is primarily achieved by influencing enterprises'macroeconomic development expectations, operating costs, and business environment, while the impact of macroeconomic factors on enterprise investments is primarily achieved by influencing enterprises'investment costs, investment income and future expectations. Then the paper analyzes the relevance of the Real Option Theory and the basic characteristics of enterprise investment decisions, based on which establishes two enterprise investment decision models. One model is Enterprise Investment Decision Model Based on Macroeconomic Fluctuations (EIDMBMF) in which the factors of macroeconomic volatilities, taxations and subsidies are taken into the research framework. By using the static simulation method, the paper focuses on macroeconomic fluctuation's impact upon factors such as expected rate of return, required rate of return, volatility of return, depreciation rate in the future, etc. and also focuses on how the transmission mechanism of these factors influencing investment behaviors. The other model is Enterprise Investment Decision Model Based on Economic Crisis Predication (EIDMBECP), which is based on EIDMMF. In EIDMBECP the factor of economic crisis predication is taken into the research framework. By using the static simulation method, the paper primarily studies how the economic crisis expected frequency of occurrence and its influence degree influence investment behaviors.Thirdly, the paper establishes Investment Efficiency Assessment Model of Diversified Ownership Enterprises Based on Macroeconomic Fluctuation (lEAMDOEBMF) and conducts an empirical analysis on the investment efficiency of diversified ownership enterprises under macroeconomic fluctuation. Considering the properties of diversified ownership enterprises and the impacts of macroeconomic factors on enterprise investment behaviors, on the basis of Richardson's Investment Decision Model (2006), with the state-owned equity ratio taken into the research framework, the paper establishes Investment Decision Model of Diversified Ownership Enterprises (IDMDOE), but the model structure over time showed significant differences. Further, with the macroeconomic fluctuation factor taken into the research framework, the paper establishes IEAMDOEBMF. According to different influence mechanisms of macroeconomic fluctuation factors, IEAMDOEBMF can be further divided into Addend Model (AM) and Multiplier Model (MM). Then the paper carries out regression estimations to AM and MM. According to test results, the two models both shows good stability. Depending on the calculation results of investment efficiency assessment model, investment efficiency of diversified ownership enterprise is analyzed from the perspectives of industry, scale, major shareholders, and regional differences. The results show that the investment efficiencies of diversified ownership enterprise in different types of samples are obvious different. Considering the differences of investment efficiencies among sample groups of diversified ownership enterprises, the paper further conducts empirical analysis on AM and MM from the perspectives of industry, sale, major shareholders and regional differences by using the method of dummy variable and grouping regressions. The results show that remarkable difference exists in model constructions of AM and MM applied among most samples of diversified ownership enterprises.Finally, the paper conducts an empirical analysis on the influential factors of the investment efficiency of diversified ownership enterprises under macroeconomic fluctuation. The results of correlation analysis prove that the investment efficiency of diversified ownership enterprises is not remarkably relevant with contextual factors and policy factors of macro economy. On the basis of correlation analysis of measuring variables of micro-influential factors between investment efficiency and corporate management, financing channel, asset characteristics and product markets, the Structural Equation Model (SEM) is adopted to conduct empirical analysis on micro-influential factors of its investment efficiency. The results show that these micro-influence factors have significant effects on investment efficiency. From the perspective of enterprise governance, reducing the degree of the larger shareholder control, improving the proportion of liquid shares, expanding the scale of independent directors, enhancing the level of executive compensation and increasing the scale of the supervisory board help to improve the investment efficiency of the diversified ownership enterprises; From the perspective of financing channel, improving the scale of internal financing and equity financing and reducing the scale of short-term debt financing help to improve investment efficiency of diversified ownership enterprises; From the perspective of assets characteristics, reducing the proportion of current assets and working capital scale, increasing cash flow of operating activities and dividend distribution ratio help to improve investment efficiency of diversified ownership enterprises. Based on empirical analysis, proposals are put forward for diversified ownership enterprises to further improve corporate management structure, intensify financing plan and management, optimize asset characteristic, promote market competitiveness and create a favorable macroeconomic environment.