A Study On Investment Efficiency Of China’s Listed Companies

Investment decision making problems related to funds rising and configuration,which is one of the important financial decisions the listed companies facing, and isposted in irreplaceable position on listed company efficient operations. Theseproblems enjoy much attention of the academic community. As the investmentdecision is the primary power of the growth in listed companies and is importantfoundation in cash flow growth, affecting the business risk and profit level, it is thecore of financial decisions in listed companies.As China’s capital market is an emerging market, the operation still has manynone perfect, which impact the listed companies’ investment behavior andinvestment efficiency, leading to the listed companies in China capital allocationefficiency is low. In recent years, China’s capital market developed fast, it isnecessary to study the listed company of investment behavior and investmentefficiency based on our country’s capital market environment and the capitalstructure characteristics. Based on the method of combining of theoretical analysiswith empirical research, I construct an investment efficiency model suitable withChina’s capital market. In order to verify the validity of the model, this paper alsofurther uses the event study methodology, through the observation of theinvestment announcement issued by changes in share prices to test the efficiency ofinvestment of measurement model market efficiency, and put forward thecorresponding policies and suggestions. This paper has important theoretic valueand practical significance for investors to better understand the secondary market tothe investment of the announcement, to the listed companies in China investmentbehavior and investment efficiency of research, and lead the market reaction to thebehavior of investment managers.The main content of this paper have five parts:The first chapter of this paper expounds the background and significance, andsummarized the research ideas and research methods. And then this paper reviewsrelevant domestic research, describes the content and research method.The second chapter summarizes the relevant theoretical basis of investmentefficiency, and the related literature at home and abroad summarizing and theenlightenment. In this foundation, this paper proposed the decisive influence factorof the listed companies in China of the investment efficiency. Chapter3constructed an investment efficiency measurement model, and thenmade a regression analysis and inspection. This chapter introduces the study samplescreening standards, and then summarizes the event study methodology and theprinciple and process of the test method is adopted in this paper.In the fourth chapter, I tested the investment efficiency measurement modeland the market effect, the announcement samples were grouped by the investmentefficiency measuring model. And then I calculate the abnormal return of theannouncement samples. The average abnormal return and the average cumulativeabnormal return are studied in this chapter, and whether there are differences inannouncement effects and analyzed.The fifth chapter explains the empirical results and put forward valuablesuggestions about the stock price changes and the investors’ behavior embodies inthis change based on the empirical tests.This paper has innovation mainly in two aspects than before in the domesticand foreign relevant research. On the one hand, this paper extends the sample size,selecting ten years sample data from2001to2010, the efficiency of investmentmeasurement model test data is more fully, the investigation is more meticulous.On the other hand, this paper creatively uses the event study methodology to testthe efficiency investment measurement model market effect, in order to testwhether the market investors has the enterprise recognition ability to theinvestment efficiency.As the global economic integration is speeding up, it is imperative to improvethe investment efficiency of listed companies in China. This paper providesmeaningful reference and value for the listed companies in China to improve theefficiency of investment and to improve the capital allocation.