The Effect Of The Company’s Performance Expected On The Efficiency Of Capital Allocation

Since Chinese reforming and opening up, Chinese capital market matures and perfect, more and more domestic companies listed, objective requirement to capital market in the aspect of the optimize allocation of social resources to play a bigger role. In the real capital allocation, in addition to the external capital markets play a role, internal capital market will also play a role of internal allocation of capital. How the internal allocation of scarce resources has always been to make strategic investment managers have to do one of the important decisions, also affect the company’s future performance and long-term stable development of important factor. Alienation and capital allocation will appear unreasonable investment capital allocation efficiency, namely investment behavior alienation is relative to the perfect capital market conditions, the optimal investment scale, deviating from the optimal investment scale of efficiency refers to the company investment behavior. Specific investment behavior alienation and can be characterized by the following two conditions:one is the company to give up the project with a positive net present value as a result of inadequate investment behavior, the other is the company’s investment projects with negative net present value caused by excessive investment behavior. General theory research suggests that many factors can cause inefficient investment behavior, such as investment decision makers the limitations of their knowledge and ability, failed to fully grasp the market information, market environment change and policymakers self-interest behavior and so on, can cause the inefficient investment behavior of the company. Scholars at home and abroad to the company’s investment decision-making activities carried out a large number of theory and empirical research, these studies mostly built on the basis of traditional financial theory, the research of the company’s investment decision-making activities of many influence factors and no considering the psychological characteristics of managers, managers of company performance expectations and actual performance differences will affect the company’s capital allocation efficiency, and scholars paid little attention to this. Over the years, are the important features of the listed companies in China in investing capital allocation efficiency is low, and scholars for its capital allocation also has a lot of explaining the reasons for low. Excessive investment behavior precipitation in overcapacity will lead to a lot of capital (and thus profitability deterioration) field, and makes a lot of resources and factors of production is wasted, at the same time lead to large increase in non-performing loans, the financial risk is greatly increased; A lot of money as a result of inadequate investment is idle, leading to slow growth or even zero growth of listed companies, as well as damage the interests of investors. So, find out the cause of the company’s capital allocation efficiency is low, to provide corresponding countermeasures, prompted the company take the optimal investment strategy to improve the efficiency of capital allocation and improve the value of the company.For companies, the investment is an important strategic choice, involves a large amount of resource relocation, the company structure adjustment and development direction to reposition problem such as; For investors, investment Means the increase of the value of the company and shareholder value, and how the investment decision-making power in the hands of senior managers, often in 1932, Berle and Means in the book "the modern corporation and private property", expounds the problems of ownership and management rights of separation, their study is from the perspective of management and shareholder interests conflict, a research firm investment behavior alienation problem provides a theoretical basis and literature support. La Porta et al. (1999) study found that controlling shareholders have a strong incentive to maximize the company’s investment behavior and shareholder interests goal deviation occur, through the company’s control inefficient investment behavior to seek private gains, encroach on minority shareholders interests. Thus affecting the main factors that influence the efficiency of capital allocation is still the top managers, this article based on this, to the company performance and executives expected as a breakthrough point to study, on the one hand, on the company’s performance and executives expected impact on the efficiency of capital allocation to provide actual evidence, on the other hand, the existing research on internal capital allocation efficiency, rare from the perspective of the company as a whole to study the internal capital markets. Now that the company’s performance as reflect the smallest unit of capital allocation efficiency, and from the Angle of company performance to examine the company’s internal capital allocation efficiency should be the correct path, are more likely to find out the influence factors of internal capital allocation efficiency. The influence factors of the capital allocation efficiency and friendly. This article is based on the special system background, expectations of company performance and the executives of companies within the group capital allocation efficiency of the relationship between theory and empirical research, solutions to the company’s actual performance is lower than expected performance has a positive effect on excessive investment whether? Company financial slack level will adjust the performance and the relationship between the excess investment: whether relaxation degree is higher, the smaller its positive effect? At present, the company actual performance than expected positive role for lack of investment? Company level of financial slack regulation actual performance than expected performance and the relationship between the lack of investment:whether the company’s financial slack level is higher, the positive role in regulating the stronger? Through empirical analysis of this paper, we can draw the following conclusions that the company has a positive impact on the performance of the company, the company has more cash flow and more easily lead to excessive investment. The actual results of the company is higher than the expected results have a positive impact on the investment, and the company has the cash flow of investment is not obvious. This can be seen in the main hypothesis of this paper is verified.