The Ineffficiency-Investment Of Chinese Family Firms And Analysis Of The Motivation

The core of investment decision is the enterprise financial management decision.The investment decisions may cause over-investment or under-investment, even influence the long-term development of enterprises.Over the past10years, Chinese family enterprises experienced the rapid development,family enterprises with the continuous large scale listed in succession,and continued to expand the scale of investment,and the family founder are eager to expand the family business so much,but for the family business,because of its corporate governance has its own "family property",the "family property" is likely to affect the investment decision of enterprises.Firstly,according to the inefficiency-investment model,this paper is based on the2009-2011family listing Corporation data,through the analysis and statistics it proves that the the family enterprises widely exist the over-investment and under-investment phenomenon.Secondly,basing on the result of inefficiency-investment model, this paper takes inefficient investment family listing Corporation between2009-2011years as the object of study,through the establishment of model,descriptive statistical analysis and empirical analysis,to test whether family governance characteristics of family enterprises is one of the cause of the non-efficiency investment.Motivation analysis by empirical analysis is based on the following perspectives:family ownership,the listing way of family firms,family involvement and intergenerational inheritance of family firms.According to the analysis of inefficiency-investment model, the study founds that,from2009-2011,among the family business,more than20%of the family enterprises exist the non-efficiency of investment each year,specially in2009,more than25%of the family enterprises exist non-efficiency of investment.And the number of over-investment enterprises and under-investment in family business was essentially flat,in2009the number of inadequate investment enterprise is slightly higher than that of over investment enterprises,which may be effected by the financial crisis.Through the empirical analysis of motivation model,the results found:(1)The family ownership is one of the main causes of non-efficiency of investment,the non-efficiency investment level is positively related to the family ownership and family business;(2)The family members’higher degree of participation is an important feature of the family management of Enterprise In China,is also one of the main motivations for Chinese family enterprises’non-efficiency of investment,and family members number of board size and the proportion of family members as general manager had significantly positive correlation with the corporate inefficient investment;(3)The family business listing approach is one of the motivation which easily lead to inefficient investment,through the IPO,the initiator who has the "Founding feelings" to the firms always pay more attention to scientific and long-term investment decision,if by listing pattern,for tunneling motivation the family firms easily have some blind investment;(4)To a certain extent,generation inheritance of the family business can effect the non efficiency investment level,the empirical results show that the firms who have completed the intergenerational transmission is prone to non-efficiency of investment.