The Investment Efficiency Of The Corporate On Non-tradable Shares Reform

It is a big baptism of share structure reform for state-owned enterprises in China and the Chinese stock market, started in 2005. Through this reform, not only increase the governance capacity of state-owned listed companies,but also improve the investment efficiency. Because of the special performance of China's state-owned shareholding structure of listed companies, its impact on investment activities and performance constraints are also different with the other listed companies. However, after the split share structure reform, the governance efficiency of listed companies has been greatly improved, with a corresponding improvement of investment efficiency. Therefore, the study of state share reform of listed companies is very necessary and is meaningful in theory and practice. This paper describes several factors which impact the investment efficiency, including ownership structure, corporate governance, free cash flow, debt financing and dividend distribution and other related variables on investment behavior, meanwhile, selects each factor basing on a theoretical analysis of variables, build model, and test them.To test the share reform on investment efficiency, the paper selects reformed state-owned listed companies in 2003 -2009, and divide into two group: before reform, after reform, test them and draw concludes as: Firstly, the state-owned listed companies reformed have been improved in investment through reform. Secondly, the change in the manufacture industry is more significant than non-manufacture industry. Thirdly, shareholder concentration is not so obviously correlated with investment.