TMT Network,Investment Behavior,and Firm Performance

With the rapid development of society and technology,the fourth industrial revolution is sweeping the world.Chinese companies are facing new development opportunities in this revolutionary revolution.How to grasp these opportunities has depended on investment.Investment is corporate growth engine and the basic of corporate value-added because investment not only determines enterprise risk and profits in the future,but also determines the growth of cash flow and the development direction of enterprise in the future.However,corporate investment is facing trouble when China is being just at the economic transition period,which market economy system has not thoroughly separated itself from the planned economy.Accordingly,China also lags behind western countries regarding the research on corporate investment.It is especially important for investment research in a new view.The traditional corporate investment research which from the beginning of perfect market to imperfect market with the perspective of agency and information asymmetry theory.There has been a network view of corporate investment research recently,and the development of managerial network that have effect on investment behavior has especially caused concern.However,these researches have little deeply concern the mechanism,and these researches have little concern TMT who are decision makers in the company.This paper studies TMT network has an impact on investment behavior in a different mechanistic view of agency and network.On the one hand,this research study the TMT network position has a positive impact on over-investment of non-rational behavior in an agency views,on the other hand,this research study the TMT network position has a positive impact on investment opportunity of rational behavior in a network view.What’s more,on the one hand,this research study the over-investment behavior has a negative impact on firm performance in an agency theory view,on the other hand,this research studies investment opportunity has a positive impact on firm performance in a network theory views.Finally,in these two different theory views to study the moderate impact on the relationship between TMT network position and investment behavior.On the one hand,this research study corporate duality and industry concentration separately moderate the relationship between TMT network position and over-investment,on the other hand,this research study corporate political ties and industry growth separately moderate the relationship between TMT network position and investment opportunity.Further,the paper collected data of China’s A-share listed enterprises for the year 2003 to 2014 containing 422417 observers of managers per year,to compute the TMT network centrality index.What’s more,the paper collected data of China’s A-share listed enterprises for the year 2003 to 2014 containing 13416 observers of corporation per year,comprehensively adopted fixed effects regression of panel data regression and robustness test,to verify the effects of TMT network position,investment behavior,and firm performance:an integration of agency and network views.According to the result,first,the centrality of TMT network has positive effects on the behavior of over-investment and investment opportunity.Second,over-investment behavior and investment opportunity have separately a mediator in the relationship between TMT network centrality and firm performance.Third,corporate duality positive moderates the relationship between TMT network centrality and the behavior of over-investment,corporate political ties negative moderate the relationship between TMT network centrality and the investment opportunity.Based on the summary of the literature review,theory building and empirical results the paper further summarizes the main theoretical contribution.First,the paper has combined the theory of network and behavior so that enriches agency theory.Second,the paper studies the property of TMT network have effects on their behavior,thus enrich the theory of upper echelons.Third,the paper has combined the theory of network and agency to study the relationship between TMT network and corporate investment,enrich corporate investment theory.Fourth,the paper focuses on the research subject of TMT supervised by board directors,thus enrich corporate governance research.Finally,the future research directions have pointed out.In theory,the future can study the combined mechanism of network and agency.Further,the future can study that the TMT network has an impact on corporate strategy such as corporate merge and diversity.On the data and method,the future can study non-A share listed companies and non-listed companies.In addition,the future can study the combination of survey and case study in method.