Research On Listed Companies' Non-efficiency Investment

As a major cause of company's development and an important foundation for growth of future cash flow, listed companies' investment will directly affect the company's financial decisions and dividends, and it has an indirect impact on the stable operation of macro-economic.Nowadays , many countries were faced with the problem of the enterprises' non-efficiency investment, Chinese listed companies show more non-efficiency investment compared with the developed countries, widespreadly known as over-investment and under-investment. Over-investment will cause large capital precipitation in the area of excess capacity, resulting in waste of resources , bring about bad debts increasing, and increasing financial risks; Under-investment is making a lot of idle funds, which slows down the growth of listed companies ,and damages the interests of investors. Therefore, non-efficiency investment of listed companies attracts much more attention. At present, few research ,on enterprise' non-efficiency investment, has given a systematic analysis in the right perspective on benefit game among interest groups, and this kind of research has an important theoretical value and practical significance to optimize investment decision-making of Chinese listed companies.In this paper, the structure is divided into six chapters. The article is based on the agent conflict with shareholders, managers, creditors and other interests, on the basis of explanation for the relevant concepts and theories, combined with the main classification of shareholding structure of listed companies, through the theoretical and empirical analysis, to know the factors which have impact on Chinese listed companies' non-efficient investment. The article will put stockholder's rights structure, the acting costs between each interest groups and the mode of financing under the same framework to build the investment decision-making model, and analyze the investment decision-making behavior tendencies of each interest group and the factors affecting the non-efficiency investment, and use the data of Chinese listed companies from 2002 to 2004 testing.The conclusions are as follows: 1. Non-efficiency investment of listed companies among 2002-2004; 2. When the internal free cash flow is ample, it is very easy to lead over-investment. Investment and cash flow are positive related, and manager opportunism makes it much stronger.3. Investment projects can effectively curb the over- investment of shareholders through debt financing and reduce second type of agency costs. 4. Although the increasing of shareholding ratio of controlling shareholders reduce the first agency costs, it increases the possibility of large shareholders who have control right occupy the interests of minority shareholders. By increasing the cost of the third agency, makes over-Investment levels and the first major shareholders present "U"-type relationship.Finally, the article concludes some policy proposals to inhibit the non-efficiency investment behavior of Chinese listed companies: regulating the incentive mechanism for the listed companies' executives; rationalizing the stockholders' rights structure of listed companies; standardizing the government on the administrative guidance of listed companies; speeding up the reform process of state-owned commercial banks; improving the listed companies with investment-related legal environment; enhancing information disclosure of listed companies transparency.