Corporate Governance, Investment Effectiveness And Operating Leases

With the2008global financial crisis, China’s economic development has led to abrief shock, appeared sluggish consumption and investment difficult unfavorablesituation. Subsequently, the state adopted a bailout move some out, especially thecentral government4trillion monetary investment which saved the affected market,but it is not a small surprise. It is the series of bailout measures, making our economyback on track to achieve a stable development and prosperity.2010is surpassed Japanto become the world’s second largest economy, which has created a miracle ofeconomic growth after the financial crisis, creating a new situation of China’seconomy and capital market development.Chinese economy is mainly an economic entity which actively guides thedevelopment of the pattern and development of the virtual economy. Importantfactors relating to economic development is an investment entity, determining thedegree of efficiency of investment efficient allocation of social resources,4trillioncurrency is the revitalization of Chinese capital market and corporate investment,creating a steady stream of power. Ensuring that business investment is an importantfactor to achieve dynamic economic development, however, how to ensure the flowof4trillion currency effects of monetary capital is the key to the central governmentbailout of full play.For large-scale machinery and equipment investment, companies often take thelease, with a minimum amount of money required to get production and operation ofequipment. However, norms and standards in terms of accounting, finance leases andoperating leases as the lease of two different nature, although the realization of theassets are leased to use, but the financial impact on businesses was significantlydifferent, especially used to measure the efficiency of investment and corporategovernance effect, the role of the two diametrically opposite. Lease operating lease isjust a way to get the right to use, often as a means of financing the company’smanagement, operations for earnings impact associated with operating leases and efficiency of investment activities, which have had a serious agency problems, thusaffecting to the interests of investors. This result also reveals information on operatinglease as an important financial information, should be fully disclosed and becomeinformation users for decision making.In this paper, in close connection with the current situation of China’s capitalmarket investments and normative framework under the guidance of the lease to anoperating lease as the core, empirical methods insights into different governancemechanisms, the behavior of different operating leases and effect, and how toincrease business investment efficiency and other related issues. The empirical resultsshow excessive investment oversight mechanisms can inhibit an operating lease,inadequate investment incentives under operating leases can be suppressed, there aretwo mechanisms for the division effect. Based on this, this paper presents theperspective from outside the company, by improving the efficiency of operatingleases to disclose information related to the gradual improvement of the corporategovernance mechanism, in order to achieve the company’s strategic goals anddevelopment plans.