Board Governance, Information Disclosure And Over-investment Studies

In response to the international financial crisis, our country government has carried outan investment-dominanted economic stimulus plan. Enterprise is the main part of theeconomical operation and the investment, the government’s macro-control policies may havean important influence on enterprises’s investment.On the premise of government carried, outlarge-scale investment,studying the efficency of the investment、whether the investment canbring a considerable return to the enterprise and promote the rational allocation of oureconomic resources is of great significance. Many scholars’ research of the theory andempirical have proved that enterprises in our country do exist the phenomenon ofover-investment. In order to effectively inhibit the excessive investment of enterprises,Scholars at home and abroad discuss ways to govern the excessive investment from the aspectof corporate governance mechanism. Corporate governance is a an integral whole, There is anatural interactive relationship between them.However, the existing research mostly isolatedpart of the corporate governance mechanism to study the effect of the excessive investmentbehavior governance.The board governance and information disclosure play an important part in corporategovernance mechanism,they have a strong relationship between each other. The board ofdirectors is the core part of the company’s internal management, on behalf of the shareholders’interest they exercise supervision, and are responsible for the information disclosure oflisted companies. Therefore, the governance effect of the board of directors is closely relatedto the quality of information disclosure..Information disclosure is to address the issue of agent under two rights separation andthe main the effective way to reduce the information asymmetry problem. High qualityinformation disclosure can reduce the degree of information asymmetry, allowingshareholders to managers to implement effective supervision and governing the self-interestof managers engage in excessive investment behavior..Previous studies did not put information disclosure, board governance and excessiveinvestment in the same study analysis framework, therefore is one-sided. Therefore,puttingthe board of directors governance as the starting point with the excessive investment asthefinishing point.Puting the disclosure of information as a intermediary between board governan and excessive investment, to study whether disclosure plays an intermediary effect.Based on free cash flow agency theory, information asymmetry theory and signalingtheory as the theoretical framework, the third part in this article analyzes the possibility thatthe information disclosure play intermediary effect between board governance and excessiveinvestment,which lay a foundation for the empirical research part of this article. Empiricalpart select2007-2011in shenzhen main board listed companies as research samples, referenceWenZhongLin (2004) the intermediary effect of inspection procedures, mainly establish fourmultivariate regression mode to test whether disclosure is a board of directors governance andexcessive investment intermediary variable.The empirical results show that our country exists the phenomenon of excessiveinvestment, especially after our country cary out the4trillion yuan investment plan in2008,the number of companies engaged in excessive investment increased rapidly,macroinvestment plan indeed induce more enterprises to engage in excessive investment behavior;Information disclosure、the independent director proportion, both separation are significantlyinhibit the excessive investment behavior of managers engaged in the damage the interests ofshareholders. Disclosure of information played a partial mediation effect between boardgovernance and excessive investment.Research conclusion of this article for fully understanding the board governance,information disclosure and the relationship between the excessive investment, constraints,managers self-interest behavior, promote the healthy development of capital markets hasimportant practical significance. At the same time, also pointed out that inhibit the excessiveinvestment behavior of enterprise should not only from the microscopic governance such ascorporate governance and information disclosure level to improve, should also be on themacro level to strengthen the supervision of government investment funds, promote therational allocation of social resources.