The Impacts Of Divergence Between Control Rights And Cash-Flow Rights On Listed Family Firms' Investment Behavior

Investment as an important activity of listed companies, which determines the company's performance and development prospects, is the starting point for financial decision-making. In reality, company's investment behavior often deviates from its optimal scale, displaying as the under-investment or the over-investment as a result of the complexity of the decision-making process and the diversity of the influence factors. The current domestic and foreign research shows listed companies generally have ultimate controlling shareholders, especially for the family firm. At the same time, the agency conflicts between ultimate controllers and minority shareholders will also affect companies' investment decision.So the research of investment efficiency of listed family firms is full of practical significance.This article defines family firm, control rights, cash-flow rights and corporate investment efficiency and other related concepts,then determines the measurement method of listed family firms' control rights and cash-flow rights and establishes the measurement model of investment efficiency. Taking Chinese listed family firms during2007 to 2009 as the sample, this paper carries on the empirical analysis from the following several aspects:the ways that ultimate controllers obtain the control rights; the current investment situation; influences on companies' investment behaviors as a result of the separation of control rights and cash-flow rights.The conclusion is as follows:the family controllers often use pyramid or other multiple structures to control the company; the current Chinese listed family firms usually present the insufficient investment phenomenon; the separation of control rights and cash-flow rights makes the under-investment phenomenon worse, and has a positive but not significant correlation with over-investment.