Research On Industries Competition, Information Transparency And The Efficiency Of Investment

In light of special economic background, investment behaviors of listed companies show the diversity and specificity in the transition economy period. Especially for China's state-owned enterprises, although a large number of joint-stock reforms are made by state-owned enterprises, the effect of the reform is not satisfactory. From a practical point of view, the interests of management and shareholders is difficult to achieve the same target, resulting in distorted corporate investment behavior and presenting some interesting phenomena, such as frequent changes in capital investment, asset substitution behavior, lack of investment over the issue and investment, bringing about the decline of enterprise value.In the opinion of modern economic theory, the price mechanism guides the allocation of resources in the market, the essence of existence of enterprise is substitution of the market price mechanism(Coase, 1937); and in the enterprise, the accounting information plays an alternative to market prices (Ball,1989), the accounting-based information which reflects the business performance guides the flow of resources, thus enhancing the transparency of accounting information is essential to improve investment efficiency. In addition, industry competition is the basis of the socialist market economy and the essential conditions of economic efficiency, innovation and economic growth. Without sufficient competition, the market economy is difficult to develop healthily and rapidly. Industry competition as external market environment also plays an important impact on the improvement of investment efficiency.In recent years, scholars home and abroad have studied that there is a very efficient, non-standard governance mechanism which support the Chinese financial and economic growth and drive Chinese enterprises to continuously improve management efficiency and the level of corporate governance, that is industry competition.Existing researches mainly focused on the relationship between corporate internal governance structure and corporate performance, but with the continuous development and further research of corporate governance, more and more scholars come to realize that the study ignored the company's market environment behind the governance structure and institutional environment, and other basic factors. The company's internal governance structure is largely born within the market environment and institutional environment. In this paper, it's based on theory of industrial organization, corporate finance and corporate governance mechanism, drawing on relevant literature research methods and conclusions home and abroad, combined with our unique background, from the industry competitive environment, it analyzes its impact on relationship between transparency of the information of the listed companies and efficiency of investment,in order to provide more empirical evidence to improve the investment efficiency of listed companies in China.Through theoretical analysis and empirical research, this study found the following:1.To improve information transparency can improve the efficiency of capital investment, that is the case of certain other conditions, information transparency and inefficient capital investment level of over-investment (underinvestment) is negative correlated, information transparency in the company's capital investment has treatment value;2.Information transparency can ease underinvestment in the state-controlled and non-state-holding enterprises, but in the non-state controlled enterprises, the enhanced transparency of information can not play the role of inhibition of over-investment;3.Industry competition helps to reduce inefficient investment, the degree of industry is negative correlated with the level of investment inefficiency and overinvestment (underinvestment)4.1n monopolistic industries, it's difficult to make difference on improvement of their investment efficiency though enhancing the degree of competitive environment. 5.The degree of industry competition can promote negative relationship between information transparency and inefficient investment level (underinvestment) which illustrates that the degree of information transparency and industry competition play complementary role on investment efficiency, however, the relationship among them on the over-investment was not significant.6.In state-controlled listed companies, the degree of industry competition plays complementary role on negative correlation between information transparency and the level of inefficiency and under investment, In non-state controlled listed companies, the degree of industry competition plays substitute role on negative correlation between information transparency and underinvestment.