The Empirical Study About Free Cash Flow And Over-Investment In The New Energy Industry’s Listed Company

"12th Five-Year" period, China’s new energy industry included in the one of the areas to be supported by the state, not only of state policy and local corresponding issued many preferential policies to encourage the development of new energy industry, making the new energy industry after several years of development, regardless of the policy environment, market, technology environments, have undergone a significant change, relatively ample free cash flow for the enterprise, along with idle capital, reinvestment of competitive enterprises to expand in order to obtain high returns become the key. Can the company’s management in order to pursue personal interests, often made does not meet the company maximize the return on the investment decisions, and even the money in the negative net present value projects, so how to properly and effectively guide the investment decisions of corporate management will become the focus of scholars pay close attention and study.This paper selects the Shanghai and Shenzhen103new energy industry in the two cities listed companies in2008-2010, a total of309samples for the study based on free cash flow and over-investment theory, on the basis of learning and summarize the relevant research results, combined with the actual situation of China’s new energy listed companies, through theoretical and empirical methods to explore the over-investment behavior of listed companies of China’s new energy industry, and impact factor analysis of over-investment behavior from the internal institutional investors stake angle, to prevent and reduce over-investment to provide a theoretical basis.Jansen’s hypothesis of free cash flow theory, for the company over investment behavior provides theoretical foundation; secondly, using the principal-agent theory, the management opportunism theory and corporate control theory as well as external opportunism on over investment behavior motivation theory; and then draw lessons from the domestic and foreign scholar’s research results, on the free cash flow more accurate measurement and based on the analysis of construction investment, excessive level model, determine the over investment in listed companies, and carries on the reason analysis, finally from the corporate governance factors:the proportion of institutional ownership, the proportion of independent directors, managerial ownership and cash dividend payment in four aspects, to establish corporate excessive investment influence model, and using the regression testing method for the analysis of excessive investment behavior and four control variables relationship, and according to the results of empirical analysis puts forward related suggestions. This paper is divided into the following five chapters:The first chapter, introduction. Detailed introduction of the research background and the significance of practice and theory, and research status at home and abroad is reviewed, which led in the framework of this domain research method, finally puts forward the innovation and deficiency.The second chapter, free cash flow and investment theory. Based on the free cash flow and investment are summarized, the reasons were analyzed, laid the theoretical foundation for this article.The third chapter, the free cash flow of investment effect analysis. China’s listed companies on the free cash flow analysis, draw the new energy industry listed company current situation, analysis of its free cash flow and investment status.The fourth chapter, the free cash flow for the excessive investment:An Empirical analysis. Based on the hypothesis and study design variables, on China’s new energy industry listed companies free cash flow on the overinvestment of descriptive statistics and regression test, draws the empirical results and analysis.The fifth chapter, the research conclusion and policy proposal. Based on the empirical results of the analysis, put forward the corresponding policy recommendations, with a view to China’s new energy industry listed companies based on free cash flow generated by overinvestment help.Through empirical analysis, to validate the proposed hypothesis, confirms China’s new energy industry listed company’s free cash flow, and excessive investment is positively correlated with corporate governance factors, and the proportion of independent directors, the proportion of institutional ownership, managerial ownership and cash dividend extents corresponding relationship.