The Research Of Organizational Characteristics’ Influence On Corporate Investment Efficiency

Investment decision is the most important part of the financial decision of an enterprise, whose efficiency decides the increase and decrease of capital stock as well as the rising and falling of the value of it. As a result, the phenomenon of inefficient investment occurs once in a while. Therefore, a series of research has been conducted by scholars from different angles on investment efficiency in order to help enhance investment efficiency of public companies. However, most of the current researches on the influence of company characteristics to investment efficiency of public companies are based on single factor studies and systematic researches are quite few.By studying company characteristics, this thesis discusses the possibility of improving investment efficiency of public companies quite systematically. To some extent, it avoids the one-sidedness of single factor researches.Specifically, based on the foundation of combination of relevant research theories and documents on investment efficiency, a regression analysis of the relationship between company characteristics and investment efficiency of a company is done by culculating the inefficient investment degree from the model of Richardson with 8indexes as explanatory variables, shareholding ratio of the first shareholder, equity restriction ratio, management shareholding ratio, overhead expenses rate, role of both president and general manager, dividend payout ratio, free cash flow,asset-liability ratio and 3 indexes, growth, company scale, listed years as control variables. Based on the nature of property right, the indexes are divided in groups and a more specific group analysis is conducted.The phenomenon of inefficient investment is quite commonly seen in public companies in China. Indeed, the nature of property right of an enterprise influences investment efficiency differently. The following policies and advice are provided in the last part of the thesis based on the real situation of public companies of China: Improving the governance structure of public companies; enhancing the executive education; establishing a sound information disclosure mechanism; reinforcing supervision of securities regulators; using enterprise cash flow reasonably as well as avoiding blind enterprise expansion; as a result, to better the index leading to the inefficiency of investment of public companies. The research of this thesis contributes to strengthening the maneuverability of existing investment theory and has realistic significance in enhancing the investment efficiency of public companies in China as well.