Board Of Directors,Stock Price Synchronicity And Inefficient Investment

In listed companies, investment efficiency is an important factor affecting the future cash flow. It is of great significance to the survival and development of the company, and it also have a great impact on the whole social capital allocation efficiency. Under the special background of the current economic transformation, listed companies facing severe challenges, the phenomenon of inefficient investment exists generally. In China, capital market development is not perfect, and the legal system needs to be improved. As a result, many companies are faced with serious financing constraints. At the same time, there are quite a few listed companies due to internal governance mechanism led to serious conflict and over-investment problem. The existence of these problems greatly reduces the investment efficiency of listed companies, and seriously affects the sustainable development of the listed company itself. And it also makes it difficult to achieve the goal of maximization of enterprise value, and may eventually lead to bankruptcy. Therefore, how to improve the investment efficiency of listed companies to achieve the goal of the company? This has become an urgent problem to be solved.Based on the above background, this paper is devoted to the study of the influence mechanism between board characteristics and inefficient investment. First we reviewed the literature on the characteristics of the board of directors, stock price synchronization and inefficient investment, and found that there are some deficiencies in the research. On this basis, the study choose the size of the board, the proportion of independent directors and CEO Duality to analyze the effects of board characteristics on inefficient investment and stock price synchronicity. And then we proposed the research framework and assumptions. Finally, we select 3,530 manufacturing listed companies as the study sample, using Stata12.0 to analyze the collected data, so as to verify the hypotheses.Through empirical analysis, the main conclusions of this study are as follows:(1) the relationship of characteristics of board of directors (the board size, the proportion of independent directors, CEO duality) and the stock price synchronicity:the effects of board characteristics on the synchronization is not same, the board size has a significant positive effect on stock price synchronicity. And we also find a significantly negative correlation between the proportion of independent directors and stock price synchronicity. However the CEO duality did not have a significant effect on stock price synchronicity; (2) the relationship between characteristics of the board of directors and inefficient investment:we find that there the scale of the boards as well as the CEO duality has positive correlation with inefficient investment. And we also find a significantly negative correlation between the proportion of independent directors and stock price synchronicity; (3) the relationship between stock price synchronicity and inefficient investment:we find a significantly positive correlation between the stock price synchronicity and inefficient investment; (4) we also find the mediating effect of stock price synchronicity.Based on above, the main contribution of this study lies in:first, we selected 3530 manufacturing listed companies as the study sample, to explore the mediating effect of stock price synchronicity of the relationship between the characteristics of board of directors and inefficient investment. As a result, this paper enriches the research of characteristics of board mechanism of non-efficiency of investment, but also provides a theoretical basis for listed companies to improve board governance, reduce the stock price synchronicity to reduce the non-efficiency of investment; meanwhile the board of directors features are classified as scale of the board of directors, the proportion of independent directors and CEO duality, and based on analysis of this, this paper enriches related research results of the influencing factors of stock price synchronicity and non-efficiency of investment; in addition, this paper selects manufacturing listed companies as research samples, and the number of valid samples reached 3530 groups. Compared to the previous study, the empirical results of this paper are more representative.