| With the development of Chinese market economy reform, Chinese Family Business has grown rapidly, which has become an important and indispensable force in national economy. Thanks to the growing Chinese capital market, more and more Chinese family-controlled companies choose landing on Shanghai and Shenzhen share markets. More than this, this companies have become better and better. As for family-controlled business, Academy have done more and more research on it most of which is focusing on the companies’ownership structure and corporate governance issues, such as impact on the corporate value of control rights and cash flow rights separation, the impact on the corporate performance of control rights and cash flow rights separation. But investment behavior, as the driving force behind the development of enterprises, is rarely discussed. Investment behavior has important influence on financing policies and distribution policies, thereby affecting the future performance and development prospects of the company, which means our study on the impact of control rights and cash flow rights separation on the investment efficiency is very necessary and meaningful.In this paper, we defined listed company which ultimate controller is individual or family as family-controlled listed company. We choose 471 companies which meet our requirements from Shanghai and Shenzhen share markets. We choose data from 2012 to2013 to discover the connection between the separation of control rights and cash flow rights and inefficient investment behavior.First of all, this paper described the definition of family-controlled business and the theoretical basis of the paper, which is principal-agent theory and control theory.This paper analyze the implementation and measurement ways of the separation between control rights and cash flow rights, as well as the mechanism of influence of the separation of control rights and cash flow rights on investment behavior.Secondly, based on the annual report of 471 family-controlled companies, we can disclosed the ownership and the share of him. Then we can calculate the control rights, cash flow rights and the separation of control rights and cash flow rights. Thirdly, by using Richardson model, multiple regression sample companies, using residuals as the extent of investment inefficiency. Finally, using the separation of control rights and cash flow rights as explanatory variables, the degree of investment inefficiency as explained variables, explore the connection between the two by using multivariate linear regression analysis.Further, using the median sample of 471 sample companies cash flow rights as boundary, this paper divided the sample into high cash flow rights group and low cash flow groups, and analyze the companies by the use of multivariate linear regression.The empirical results show the prevalence of inefficient investment behavior in Chinese family-controlled listed company, the number of underinvestment sample is more than overinvestment sample. The more of the separation, the more serious underinvestment is based on the interests of synergy, in the high cash flow rights group, the degree of separation has no significant effect on the efficiency of investment, in the low cash flow rights group, the degree of separation has a significant positive correlation on the underinvestment. In the study of regulation of cash holdings, the data showed no significant adjustment coefficients, adjust effect is not obvious.In order to prevent the ultimate controller of family-controlled companies from chasing after private benefits and raising the risk of encroaching on the interests of medium-small shareholders, this paper provides three suggestion. First, improve the ownership structure and supervision mechanism; secondly, reducing the control chain level, reducing the degree of separation of control rights and cash flow rights; last but not least, introducing the system of professional manager and improve the proportion of family controlling shareholders. |
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