Research On Relationship Between Ownership Structure And Ineffective Investment In Manufacturing

Investment plays an important role on economic growth in China, but ineffective investment is getting worse in recent years, which mainly displayed in the form of inadequate investment and over-investment.shareholder structure reform was carried out from2005to2008. This Article studies the relationship between ineffective investment and ownership structure, which has already finished the shareholder structure reform.It looks forward to improving enterprise’s inefficient investment behavior from the perspective of ownership structure.This article mainly uses both the methods of literature research and empirical study. It analyzed the relationship between ownership structure and ineffective investment in theory and empirical study. Firstly, it mainly introduces the background, significance of the study, research status at home and abroad. Secondly, it mainly introduces the concept of ownership structure and ineffective investment, as well as related theoretical analysis. Finally, it uses SPSS for descriptive statistics analysis, correlation analysis, multivariate linear regression analysis, robustness testing and gets the conclusions and recommendations of the study.It was found that State-owned shares curbs the level of corporate investment and over-investment to some extent, at the same time, it also easily leads to underinvestment, but if the first shareholder is State-owned shares, it will easily cause overinvestment; The increase of corporate shares stake can inhibit over-investment effectively, but it also easily leads to insufficient investment; the level of investment will rise along with the increase of the circulation stock, which can easily cause over-investment, instead of insufficient investment; In contrast to insufficient investment, investment and over-investment will rise along with the increase of the Largest shareholder stake. Through the analysis of the research findings, six recommendations are made as follows:(1)Establish a control system to restrict large shareholders;(2)Increase the stake of corporate shares, at the same time, encourage corporate cross shareholding and improve the internal governance structure of the corporate shareholders gradually;(3)Reducing state-owned stocks appropriately;(4)Improving the internal control system;(5)Perfect legal mechanism;(6)Enhancing transparency in information disclosure and external oversight.