Government Intervention, Governance Structure And The Over-investment Of Enterprise

In recent years, the growth rate of investment on fixed assets in our country continuesto remain above20%, accompanied by high investment rate is the large of thenon-efficiency of over-investment behavior. Many scholars study the causes of theover-investment of our country’s enterprises from a single macro as well as the microrespectively. However, the external environment of corporate governance is the foundationof the internal governance mechanisms. Studying the internal governance’s influence onover-investment must consider the external environment of enterprises fully. Under thebackground of special transformation of economy system, putting the governmentintervention and internal governance in the same research framework to study theover-investment behavior of state-owned listed companies is of great significance in ourcountry.Basing on the background of China and the market environment, the author study therelationship between the government intervention, internal governance and the over-investment of enterprises, choose the date of A shares of the listed company from2009to2011as the sample, use the empirical data to test. The article gets the following mainconclusion:(1) The more government intervention, the more serious over-investment.(2) Thefirst major shareholder’s shareholding and over-investment in U-shaped relationship; theproportion of independent director has the significant negative relation withover-investment; high pay can inhibit the over-investment of the enterprise to a certainextent.(3) According to the level, the government intervention is divided into two groups,studies find that government intervention strengthen the relationship between the firstmajor shareholder’s shareholding and the over-investment; government intervention canweaken inhibitory effect of the independent directors on over-investment; only in low levelgroup, managers compensation incentive can play a role of incentives.