Financial Ecological Environment, Debt Restructuring And Inefficient Investment

In the incomplete markets, inefficient investment is the company’s inventment behaviors which deviated from the goal of maximizing value of the company. According to the degree of deciation between the actual total investment and the investmenting level which is expected and optional, nefficient investment can be divided into over-investment and under-investment. For an investment project, it is an over-investment project if a company invest in a project whose NPV is less than zero. Similary, it is an over-investment project if the company give up a project whose NPV is greater than zero. A lot of scholars hold that liabilities can prevent management’s inefficient investment. This can be called Camera Govermance of Liabilities. Debt restructuring is that creditors compromise according to the agreement between creditors and debtor and the ruling made by the court when debtors in terrible finance trouble. This paper will study if debt restructuring in company micro level can influences the Camera Govermance of Liabilities, and influences the inefficient investment of the company. Moreover, as an exogenous variable, if financial ecological environment plays a role in the relationship between debt restructuring and inefficient investment.Since the reform and opening up, China has made remarkable achievements. On property nature, Chinese listed companies have two forms (Private listed companies and non-private listed companies). The private economy has been the most dynamic growth in Chinese market economy, has had a major impact on both in number and in strength aspects of social progress and economic development. More importantly, the private listed companies are less affected by government constraints, incentives and more flexible, for non-listed companies private ubiquitous absence of owners, the impact of the SBC and other liabilities governance effect of private and listed companies not serious, and therefore they have a better market resistance, it can be more truly reflect the stock market. Therefore, we used the Shanghai and Shenzhen A-share 2007--2014 on Private Listed Companies empirical research samples.In this paper, we combined the qualitative and quantitative research methods. Specifically, this study included qualitative literature analysis and event analysis; quantitative research included descriptive statistics, Logit regression analysis, mixed OLS regression analysis, propensity score matching analysis and the use of nuclear pairing method results conduct robustness tests.This paper is divided into seven parts, details as follows:The first part is the introduction. This section described the research background, proposed research topics of significance, on this basis, introduced research methods and research ideas, pointed out the existence of innovation and research expected shortcomings.The second part is the literature review. This section used literature analysis, through an analysis of a large number of documents about inefficient investment, and reviewed current research.The third part is the theoretical basis. First, this section defined the debt restructuring, inefficient investment, financial ecological environment; second, described the principal-agent theory and the theory of asymmetric information and non-efficiency investment relationship under imperfect market conditions, so it can provide a theoretical basis for the fourth and the Ⅴ part.The fourth is the study design. First, we made three assumptions based on the theoretical analysis of the Debt restructuring and non-efficiency investment, the impact of the financial environment and debt restructuring, the financial ecological environment whether or not impacted on the relationship between the debt restructuring and non-efficiency of investment; second, we defined the independent variables, the explanatory variables and the control variables.The fifth part is the empirical research results analysis. This section used Excel13 and stata12 statistically analyzed sample data. We analyzed and discussed them from traditional regression in which also included descriptive statistics, Logit regression analysis and linear regression analysis and propensity score matching (PSM) under the nearest neighbor matching,Part Ⅵ is the robustness test. This section used propensity score matching method nuclear matching (PSM), and the resulting conclusion was robust.Part VII Conclusions and Implications. This paper argues that debt restructuring can significantly curb over-investment, but also can significantly promote the under-investment problem; the financial environment, the worse the more prone to debt restructuring; the impact of debt restructuring on the non-efficiency of investment due to financial ecological environment changes:If the financial environment is good, the debt restructuring does not affect non-efficiency investment; but if the financial environment is poor, debt restructuring significantly curb excessive investment, and significantly promote underinvestment, and inadequate investment in promoting the role of inhibition greater than overinvestment.