Correlation Of The Ownership Structure And The Efficiency Of Investment

Investment in the company's financial activities has an important position, and is the main motivation of the company growth, an important foundation for the growth company's cash flow in the future and has a direct impact on the company's performance, which determines that it has the great value studying the investment of enterprises. As important institutional arrangements in the level of corporate governance, equity structure has an important influence on corporate governance and is bound to affect investment efficiency. Therefore, the meaning and value is self-evident of the research on relation between the company ownership structure and investment efficiency. From the recent documents on the relationship between ownership structure and investment, most of them are concentrated on the main shareholders' occupation of the interests of minority shareholders under the ownership structure, but the research on the relationship between the ownership structure and the investment efficiency from the perspective of the ultimate control according to the specific management environment in China may be more innovative, which is the point of writing this article.The article studied the effect that the ownership structure has effect on the efficiency of investment from theoretical and empirical aspects by the listed companies' data in Shanghai and Shenzhen Markets in China. The article divided the ownership structure into the nature of ultimate controller, the separation between the cash flow rights and the control rights, the hierarchical structure of control rights, etc in order to in-depth research. We use the Richardson's (2006) residual model to measure the efficiency of investment, in accordance with the residual's value, more than zero or less than zero, divided the sample into the over investment sample and the under investment sample, and study the different characterization of explanatory variables in the different samples. At last we proved the effect that the external governance environment has effect on the investment efficiency. The results show the control rights is related positively to insufficient investment, the performance of the occupation effect; cash flow rights with the degrees of investment deviation is positive correlation, possibly because the investors reduce investments in order to cut down the risk; the separation between the cash flow rights and the control rights with investment deviation degrees is the variable relation like inverted U-type in over-investment sample, the time of separation between the cash flow rights and the control rights was not significant, the square significant, as similar to the inverted U-shaped relationship in the total sample, not significant in the insufficient investment sample, probably because the relation of separations and low efficiency investments will appear a marginal depression beyond a certain limit. The studied results about the nature of Ultimate controllers and Investment Efficiency have shown that the national ultimate controllers have a significant inhibitory effect on the low efficiency of investment. State-controlled listed companies, especially state-owned directly enterprises have inhibited the insufficient investment in the sample of under-investment and are not significantly negative to insufficient investment, because the state-owned enterprises bear a special responsibility to society and have the special relationship with the government, so are easier to get adequate funding; The separation that the state is ultimate controller of the listed company is related positively to over-investment in the over-investment sample, which shows that the ultimate controllers that are stated exacerbated over-investment of the listed enterprises. The research about External-governance environment found that market variables have negative correlation with the efficiency of investment, indicating the good external governance environment will improve non-efficient investments to some extent. Robustness tests also confirmed the above findings.The research provides a new discovery about our ownership structure on the efficiency of investment, which has important theoretical and practical significance. The article provided policy advice, research deficiencies and prospects in the end of the paper.