The Nature Of Shareholders With Power Balance And Firm Efficiency Of Investment

China’s listed companies exist the "double agent", the company’s management agentand between the shareholders, and the latter is more serious. Agency problems lead toenterprises to invest inefficiently, that lead to over-investment or inadequate investment. Inforeign equity balance theory can solve this problem, but it does not receive unanimousapproval in the practical application of our country. Taking into account of the distinctivefeatures of the ownership structure of China’s enterprises, it has a significant impact on theinvestment behavior. However, the tie between the nature of shareholders with powerbalance and the efficiency of business investment is of great significance.Based on the existing literature and related theory, we put forward three hypotheses.And, we select the panel data of Small board of listed companies in China from year2007to2009as the study sample. The study finds: nonlinear relationship between ownershipconcentration and efficiency of business investment, and the main negative effects; thesecond largest shareholder ownership concentration play a significant checks and balances,which will help the efficiency of investment and ownership concentration is more high thatthe phenomenon is more obvious; shareholders nature can affect the efficiency of businessinvestment, the shareholders of private have stronger checks and balances. Finally, we givesome targeted policy recommendations according to the conclusions.