The Empirical Research On Over-investment And The Control Mechanism Problems Of Listed Steel Companies

In recent years, many businesses face investment expansion impulse, continuous replenishment, and expand the scope of investment, do not even invest in their own areas of expertise, the end result is not only a decline in investment efficiency, but also caused a large waste of social resources . Many listed companies, had good business performance, is blind to the diversification, and ultimately lead to a vicious capital increase, affecting the development of their own, and even caused their bankruptcy. Listed companies in China which led to a blind over-investment there are many cases of failure, it is necessary to find the reasons for over-investment companies, to take effective measures to restrict over-investment behavior of listed companies, in order to achieve the maximization of corporate value.At present, many scholars are studying the behavior of over-investment enterprises, foreign study has taken steps earlier, has now achieved some results, draw some conclusions, they found that over-investment enterprises have a certain behavior and the relationship between corporate governance , you can improve the corporate governance role in reducing the company's free cash flow to control the behavior of over-investment enterprises, etc.; these findings on the domestic scholars study has important reference value. From the perspective of empirical investment behavior of listed companies over the control mechanism, and to recommend effective countermeasures to alleviate China's excessive investment behavior of listed companies. This paper analyzes theoretically the existence of listed companies in China over-investment behavior, and the company's free cash flow more easily lead to more investment behavior over the place, and then analyzed the effects of several listed companies in China produce over-investment behavior, proposes the underlying assumptions. Finally, listed companies in the steel industry selected sample data for 2007-2009 to construct an empirical test model. This article from the corporate free cash flow and corporate governance research firm, both to produce over-investment behavior control mechanism. The empirical test, the following conclusions:(1) China's steel industry over the prevalence of the listed company investment behavior, including plenty of free cash flow of listed companies are more likely to over-investment behavior, and the degree of over-investment and the level of free cash flow positive relationship exists. (2) payment of cash dividends and debt financing are over-investment behavior control mechanism, can effectively restrict payment of cash dividends over-investment behavior of enterprises, but the constraints of excessive debt financing, the effect of investment behavior is not significant.(3) in the corporate governance mechanism, over-investment behavior of independent directors on the role of obvious constraints, the manager and chairman and general manager of ownership separation of ownership and constraints on the effects of over-investment behavior is not a valid play.