The Research On The Administrative Effect Of Liabilities To Excessive Investment In Chinese Listed Companies

Since the financial crisis in2008, the country’s4trillion plan basically most of them used to put in a large-scale infrastructure, such as steel, coal, such as roads, many are repeated investment and redundant construction, which resulted in overcapacity, low profits and high returns on capital investment problem of China’s economic development into a difficult situation.With China’s investment environment change, the importance of complex multi-listed company’s business and financial decision-making coupled with the conflicts between shareholders and company executives, the company’s investment behavior may also start from enterprise value maximization goal lopsided investment overheating is a huge damage not only the company’s long-term development, has also affected the line of economic development and social development of China as a whole.From some Western scholars over-investment in the literature can be seen that the constraints of excessive investment are:to improve the system of governance of listed companies, more pay dividends rather than retained too much there is that short-term liabilities through debt or way to raise funds. Chinese stock market is through the restructuring of many listed companies come from the former state-owned enterprise reform, the dividend is not just paid these constraints resulted in the share-based payment are not many, the complexity of the listed companies to make corporate governance more difficult is not very good grasp and difficult to reach concrete results.Therefore.I choose the main factor of liabilities for further study. First by reading a lot of literature grasp the direction of the research and have a general idea, but also to learn from. Next, in the theoretical part describes how to measure the degree of over-investment and liabilities camera governance mechanisms and lay the foundation for the next part of the empirical analysis. Investment overheating of China’s listed companies, the existence of this phenomenon in the empirical part of the main reasons for the analysis of verification, and then borrowing liabilities in today’s listed capital environment is a constraint to do an empirical test of excessive investment and analysis, coupled with each company’s debt maturity structure in different industries, different governance will be the liability under these different constraints have different performance and results, this analysis considered the impact corporate over-investment factors, such as the size of the period the proportion of free cash flow, there are liabilities. Finally I combine causing overheated investment phenomenon from different angles and a more targeted recommendations.