An Empirical Study Of Cash Flow, Ownership Structure And Investment

This paper choose Shanghai A share listed companies which eliminate thefinancial and insurance from2003to2011as research samples. Using the cash-flowrights and the divergence between the control rights and cash-flow rights of the firm’sultimate controller, we differentiate the reason of positive association betweencash-flow and investment and judge the investment situation of listed firms. Wedocument that in our listed companies,the cash-flow and corporate investments haspositive relationship; taking2008as transition point, we find that our listedcompanies experience over-investment between2003and2007, and experienceunder-investment between2008and2011. Through the variation between differentyears, the results show that companies experience over-investment in2003,2006and2007,the investment situation of2004and2005are much closer over-investment. Andthe situation of2008and2010are under-investment,2009is over-investment,2011ismuch closer under-investment; dividing the samples to different industries, we findthat the investment situation of primary industry is consistent with research samples,that is, primary industry experience over-investment before the financial crisis andexperience under-investment in the wake of financial crisis. The second and the thirdindustry also experience over-investment before the financial crisis, but the situationis relatively good shape when the financial crisis stars and only have differences inchanging trend.