The Study Of Non-efficiency Investment Behavior Based On The Corporate Governance Perspective

As the most important financial decision, investment plays an important role on the growth of company and the allocation of social resources. On the condition of perfect capital market, investment decisions depend only on the net present value of the project, and business investment spending depends only on the investment opportunities of the company. In reality, however, deviations from the optimal scale of investment exist widely. These are called non-efficiency investment in the academic area.The author makes normative analysis on how shareholders-management agency conflicts, the ultimate shareholders-minority shareholders agency conflicts and financial constraints impact on non-efficiency investment. The author finds that preference to set up a business empire of the management will lead to over-investment, and risk aversion characteristics will lead to insufficient investment; the degree of financing constraints is positively related to the degree of insufficient investment; Private Benefits of Control will lead to excessive investment and financing constraints will cause insufficient investment.The author does empirical test on the A-share listed companies from2004to2010, and use the separation of the ultimate shareholders’ control rights and cash flow rights degree and nature of property rights as the grouping variable.In the companies where the ultimate shareholders’ control rights and cash flow rights does not separate, the companies where the ultimate shareholder is the country over-invest due to management preferences to set up a business empire. In the companies where the ultimate shareholder is the state-owned corporate enterprise, the non-efficiency investments does not exist significantly, which shows good corporate governance. In the company where the ultimate shareholder is non-state-owned corporation or person, it behaves as inadequate investment, which is largely due to financing constraints.In the companies where the ultimate shareholders’control rights and cash flow rights separates, the companies where the ultimate shareholder is the country over-invest due to management preferences to set up a business empire. The companies where the ultimate shareholder is the state-owned corporate enterprise over-invest because the ultimate shareholder has expansion motivation to obtain Private Benefits of Control, and corporate financing constraint does not exist. The companies where the ultimate shareholder is non-state-owned corporate enterprises or individual does not show significant over or inadequate investment performance, mainly because the ultimate shareholder has the motivation to obtain Private Benefits of Control and financing constraints exist, the two effects on the scale of investment are opposite, thus superimposed on the effects is uncertain.The empirical result shows that the impact of two types of agency conflicts and financing constraints on non-efficiency investments, and also provides empirical evidence for impact of differences in the nature of property rights on the management’s behavioral characteristics and financing constraints. Accordingly, we propose the following policy recommendations:Firstly, we should establish and improve the system of investor protection laws and regulations; Secondly, we should improve the system of independent directors to restrict internal control behavior; Thirdly, we should improve the information disclosure system to ensure that investors have the right to know; Fourthly, we should establish effective state-owned manager market and improve the dividend paying system of state-owned enterprises; Fifthly, we should vigorously develop the bond market to ease the private financing constraints.