| Since China’s reform and opening up, China’s capital market size has gradually increased. the private capital also has a rapid development. With the development of the Shenzhen small and medium-sized plates and the2009GEM was launched in Shenzhen, China’s family-controlled listed companies are developing rapidly, more companies arised which have greater influence on their respective fields, such as SANY and GOME. Whether it is from the contribution of scale, profits and taxes, or employment, family-controlled listed companies has become an important part of the national economy. For family-controlled listed companies, there are some studies on the corporate governance issues in the conditions of separation of control rights from cash flow rights, like the impacts of separation of control rights from cash flow rights on the value of companies or investment behaviors. Based on the assumption of economic man, the ultimate controllers of family-controlled listed companies will use their control rights to grasp maximum benefit for the families. When the separation of control rights from cash flow rights changes, based on the consideration of risks and benefits, the family controller may change the impact imposed on the listed-company’s investment behavior, the investment efficiency changes as well. Investment as an important activity of the listed company, is an important foundation of the main driving force of development of the company and future cash flow growth, investment efficiency will directly affect the company’s performance and prospects. Therefore, studies about the impacts of separation of control rights from cash flow rights on the efficiency may have positive effect to help to prospect the company’s future and boost investors confidence.Retrieve the relevant research literatures, they are almost all about the researches on the impacts on the companies’value, ignored the transmission mechanism, investment efficiency which affects companies’value. Therefore, the studies about the impacts of separation of control rights from cash flow rights on the investment may reveal the black box of transmission mechanism clearly.The paper is divided into six chapters, each chapter as follows:Chapter1.IntroductionThis chapter first introduces the background and significance of this study, followed by the study of ideas and research framework are described. Two collected in the empirical part of this article with obvious contrast characteristics of sample companies in the research background, their investment efficiency changes following the separation of control rights from cash flow rights changes will be a very vivid interpretation of this article’s intention. In order to make the idea of this study have a more intuitive feel, we make the idea of this article framed.Chapter2.The current research situationSince the relevant literatures collected are limited, we make the literature review as a review of current research situation. Some scholars based on the agency theory of majority shareholders and minority shareholders, got research results that the separation of control rights from cash flow rights will cause the company’s non-efficiency investment. Scholars studied the two main manifestations of non-efficiency investment, under-investment and over-investment. Some of them have come to the conclusions of the greater separation of control rights from cash flow rights more easily lead to under-investment.But there are also some scholars have come to the conclusions that the separation of control rights from cash flow rights and over-investment showed a significant positive correlation between the sample sub-property rights.Chapter3. Theoretical analysisThis chapter first has a concept defined which related to this article, such as family company, ultimate controller, control right, cash flow right and investment efficiency. First enumerate two or three of the concept definition and the definition of what characteristics, and then give this paper to define and point out features or meaning of the defined in the definition part of the writing mode.Second, we make a brief introduction about the theoretical basis of this article. In this paper, it relates to the theoretical basis of the principal-agent theory, incomplete-contract theory and control theory. After a brief introduction to the theoretical basis, we also described the relationship between the theoretical basis and this paper, to show that the theories instruct this paper.Again, there is a brief introduction about the separation of control rights from cash flow rights and its implementation.In this article, due to the separation of control right and cash flow right is a very important concept, and therefore defines the separation of control rights from cash flow right. There is also a introduction of the ownership structures which produce the separation of control right from cash flow right, like direct control type, pyramid type and cross shareholding type.Finally, there is a deep parsing of the relationship between separation of control right from cash flow right and the investment efficiency. Here is this paper’s writing logic, through this logic, it shows the impact of separation on the family-controlled listed companies’investment efficiency, the greater separation, the more serious inefficient investment, and based on the interests of synergies, higher cash flow right has a certain extent to the negative impact on the investment efficiency.Chapter4. Empirical research designmentThis chapter first gets two hypotheses on the basis of analyses of the impact of separation of control right from cash flow right on the investment efficiency. Secondly, the variables of this paper have been defined and the measurement of each variable has been listed as well. Again, the models and samples of this paper are explained. There are two models in this paper, one is Richardson Model, which is used to measure the degree of inefficient investment, the other is a multiple regression model, in which,the separation of control right from cash flow right as the key explanatory variable, the degree of inefficient investment as the explained variable.Chapter5. Empirical TestThis chapter first collects the investment efficiency data of selected samples from empirical research of family-controlled companies’investment efficiency based on the Richardson Model.Secondly, this paper divides the investment efficiency data into two groups, one is under-investment group and the other is over-investment group. Then, use the model to verify the impact of separation of control right from cash flow right on the under-investment and over-investment respectively. Study found that there is a significant positive correlation between the separation of control right from cash flow right and under-investment of family-controlled listed companies.Again, based on the interests of synergies, all samples accordance with the median value of cash flow right are divided into high cash flow right group and low cash flow right group to test the impact of separation of control right from cash flow right on under-investment or over-investment in different level of cash flow right. The study found that the greater separation, the more easily lead to a under-investment when the controlling family holds a low cash flow right.Finally, due to the Richardson Model application constraints and the different measurements of variables may affect the empirical results, this section makes a robustness test. The test result shows that the precious empirical tests are not affected.Chapter6. Conclusions, Countermeasures and Limitations of this paperThis chapter first obtained the conclusions of this paper based on the theoretical analysis and empirical tests.①It is common that Chinese family-controlled companies exist inefficient investment.②The separation of control right from cash flow right affect the investment efficiency of family-controlled companies, the greater separation, the more serious of under-investment.③High cash flow right will inhabit the negative impact of the separation of control right from cash flow right on the under-investment.Secondly, the paper supplies some targeted suggestions based on the research conclusions.①Compress the level of control chain to ease the problem of widespread non-efficient investment behaviors.②Limited the separation of control right from cash flow right in order to inhabit under-investment behaviors.③Improve the level of cash flow right of family-controlled companies to limit their inefficient investment behaviors.Finally, some of the limitations of this writing, is briefly described.The main contribution of this paper is as follows:First, this paper expands the perspective of corporate governance issues caused by the separation of control right from cash flow right of family-controlled companies. Currently, scholars’researches more focused on the impact of corporate value, while few on the transmission mechanism which affect the corporate value. This paper is on the point of investment efficiency, to verify the different level of separation of control right from cash flow right how affects the investment efficiency.Second, fill the literature gap. The literatures searched by this paper mostly focused on the agency problems generated by the separation of control right from cash flow right. While the special group of family-controlled companies haven’t been discussed. Therefore, this article attempts to conduct a useful attempts and tries to fill the blank in the research literature.Further research directions:First, the main effort of this paper has been made for the solution of the impact of separation of control right from cash flow right on the investment efficiency, and is mainly negative impact, while the positive impacts haven’t been discussed. Therefore, future research can focus on this.Second, it is difficult to obtain the ultimate controllers’preferences on different investment objects, and can not study the agency problems caused by separation of control right from cash flow right. In the future,it can be studied if the data could be collected.Third, some academics have already obtained that the controlling shareholders of the corporate who want to appropriate company’s resources are motivated to allow the company to hold more cash. So, it is possible to study that does the level of cash flow affect the investment efficiency. But pay attention to the possible endogeneity problem. |
