| The allocation of board seats in family firms has always been the focus of academic circles,and how to distribute seats on the board that is the core issue of the board seats allocation,and it is also an important topic of corporate governance.In fact,the board is a place where the representatives of various stakeholders play power games.The agency conflicts between shareholders and executives,as well as between various types of shareholders mostly occur on board(Zhao and Lu,2017).Therefore,how to improve the governance efficiency of the board family firms becomes particularly important.Although the existing research mainly discusses the supervisory function of the board,the decision-making function is also one of the basic functions of the board(Meng and Lai,2019).Xie et al.(2011)pointed out that the basic function of the board is to make operating decisions.Moreover,Article 107 of the Guidelines for Articles of Association of Listed Companies revised by the China Securities Regulatory Commission in 2016 states that one of the important functions of the board is to “decide on corporate business and investment plans”.It can be seen that the board is a decision-making body of enterprise investment,and will decide the investment plan of a company.For family firms,the excess family board seats as an enhanced control mechanism will make the holding family more capable of influencing the voting results investment proposals of the board,which in turn can affect the investment decisions of enterprises(Chen et al.,2012;Liu et al.,2020).From the existing literature,there are few researches on the excess control of family board seats at domestic and foreign.Previous studies have mainly investigated a series of economic consequences caused by excess control of family board seats under the assumption of rent-seeking concept of family control,while few scholars have paid attention to the governance effect of excess control of family board seats under the assumption of efficiency concept of family control.Only Chen et al.(2013b,2014)discussed the influence of excess control of family board seats on the efficiency of bank credit contracts and commercial credit capital allocation based on rent-seeking and efficiency assumptions.This shows that the discussion on the “efficiency theory” of family control right in the existing literature is not sufficient and complete,and has not examined the influence of excess control of family board seats on corporate investment structure,investment efficiency and firm value from both the rent-seeking hypothesis and the efficiency hypothesis.Therefore,this paper takes the A-share listed family firms in China from 2008 to 2018 as research samples,explores the influence of excessive control of family board seats on corporate investment decision and firm value,and further analyzes the influence of excess control of family board seats on the relationship between investment decision-making and corporate value.The research conclusions of this paper are summarized as follows:(1)By examining the relationship between excess control of family board seats and corporate investment structure,we find that the behavior and degree of excess control of family board seats are positively correlated with long-term investment intensity and negatively correlated with short-term investment intensity,which supports the hypothesis of efficiency view.Further analysis shows that regardless of the regional system efficiency,the behavior and degree of excess control of family board seats are significantly positively correlated with the long-term investment intensity of enterprises,but only when the efficiency of regional system is higher,the short-term investment intensity of enterprises will be reduced by raising the degree of excess control of board seats of holding family,and there is no evidence that the separation of the two rights will affect the relationship between excess control of family board seats and corporate investment structure.At the same time,when the enterprise is under the control of the founder and in the growth period,the behavior and degree of excess control of family board seats not only has a stronger positive impact on the long-term investment intensity,but also has a more obvious negative impact on the short-term investment intensity.However,when the family firms are in the mature stage,only the behavior of excess control of family board seats is positively correlated with the long-term investment intensity of enterprise.In addition,we also discussed the long-term investment preference of family firms,and find that the positive impact of excess control of family board seats on the long-term investment intensity of firms is mainly reflected in the increasing of capital expenditure intensity,rather than the promotion of R?D investment intensity.Finally,after controlling the potential endogenous problems,excluding the influence of chairman's authority and independent directors,re-measuring the corporate investment structure and narrowing the sample range of family firms,the above main conclusions are still valid.(2)By examining the relationship between excess control of family board seats and corporate investment efficiency,we find that the behavior and degree of excess control of family board seats are significantly negatively correlated with inefficient investment of corporate,which supports the hypothesis of efficiency view.Further analysis shows that when the regional legal environment is poorer,there is a separation of the two rights,founder controls the firm,and information transparency is lower,the behavior and degree of excess control of family board seats has a more significant negative impact on corporate investment efficiency,which shows that the governance effect of excess family board seats can only be reflected under acertain conditions.At the same time,we also find that the excess control of family board seats can improve corporate investment efficiency mainly by restraining over-investment,and alleviating under-investment to a certain extent.Finally,after controlling the potential endogenous problems,excluding the influence of chairman's authority and independent directors,re-measuring the corporate investment efficiency and narrowing the sample range of family firms,the above main conclusions remain unchanged.(3)By examining the relationship between excess control of family board seats and firm value,we find that the behavior and degree of excess control of family board seats are positively correlated with firm value,which supports the hypothesis of efficiency.Furthermore,we also find that the long-term investment intensity is positively correlated with firm value,while the short-term investment intensity has no significant relationship with firm value.Moreover,the inefficient investment will bring about the loss of firm value.In addition,the excess control of family board seats will not only strengthen the positive impact of long-term investment intensity on firm value,but also weaken the negative impact of short-term investment intensity on firm value,and also weaken the negative impact of inefficient investment on firm value.After controlling endogenous problems,excluding the influence of chairman's authority and independent directors,remeasuring investment decisions and narrowing the sample range of family firms,the research conclusions remain unchanged.(4)This paper also find that the positive impact of long-term investment intensity on firm value mainly comes from the increase of capital expenditure intensity,and both over-investment and under-investment will lead to the loss of enterprise value.At the same time,the excess control of family board seats will only strengthen the positive impact of capital expenditure intensity on firm value,but will not significantly affect the relationship between R?D investment intensity and frm value.In addition,the excess control of family board seats can not only reduce the negative impact of over-investment on firm value,but also weaken the negative impact of under-investment on firm value.Finally,based on the research conclusions drawn on the influence of excess control of family board seats on investment decision-making and firm value,this paper gets the corresponding management enlightenment,and points out the research limitations and future prospects. |
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