Research On The Impact Of Top Management Turnover On Investment Efficiency Based On The Accounting Conservatism

Investment as one of the three economic activities of enterprises determines the lifeblood of enterprises. As the policy makers and executors of the investment activities, the executives have the direct responsibility to the effectiveness and economic consequences of investment activities. As the attention from the outside world, whether the top management turnover will improve the investment efficiency of the companies?In addition, the accounting conservatism as a restraint mechanism plays an important role in monitoring managers’ investment decisions. Prudent accounting policies can alleviate the agency conflicts, reduce the information asymmetry between the internal and external.So, whether the accounting conservatism has an impact on the relationship between executives change and the investment efficiency, these problems are to be studied and discussed. Based on these problems, this paper will have a research on the impact of top management turnover on investment efficiency and the moderating effect of the accounting conservatism in which to play.First, based on the literature review and reorganization of domestic and foreign scholars, this paper defines the concept of the executive changes, accounting conservatism and investment efficiency, elaborate the related theories, and make a further analysis of the three variables’ current situation in China’s capital market.Secondly, on the basis of theoretical analysis of the relationship between the executive changes and investing efficiency, this paper selects the listed companies’ empirical data from 2012 to 2014 in China’s A-share market as samples, and using Richardson’s(2006) model to measure the investment inefficient, the investment inefficient will be divided into overinvestment and underinvestment.By constructing the multiple regression model, this paper empirically test the impact of top management turnover on the overinvestment and the underinvestment.Thirdly, based on the theoretical analysis of the executive changes, accounting conservatism and investment efficiency, this paper selects the listed companies’ empirical data from 2012 to 2014 in China’s A-share market as samples, through the establishment of the multiple regression model, this paper empirically test the moderating effect of accounting conservatism in the relationship between the top management turnover and the investment efficiency.Finally, this paper puts forward the policy suggestions from the aspects of the executives change and accounting conservatism to improve the investment efficiency of enterprises. Including the perfection of the appointment mechanism, the incentive and constraint mechanism of top management, and enhance the level of accounting conservatism by perpecting the aspacts of the accounting personnel, accounting policies, and internal audit to improve investment efficiency.