Internal Control?Financial Distress And Corporate Investment Efficiency

The importance of investment, no doubt, it is the foundation of every enterprise survival growth, is an important premise of profit, so each enterprise is an important goal is to make investment decisions, it will determine whether the enterprise can walk far. Investment efficiency is the company's investment in a project the inputs and the final output can be obtained in advance the estimated yield, can improve the company's overall value of the capital allocation efficiency. View of most enterprises of our country investment condition, both over-investment and under-investment, these phenomena are very common, both belong to the inefficient investment behavior, which bring great harm to our market. With the continuous development of economy and the market, more and more experts have realized the importance of reasonable investment and improve the efficiency. Therefore, studies our country enterprise is well worth the investment efficiency of this subject.Many of the companies in our country last fall because of pursuit of high performance and blind investment, ignoring the potential financial risk, and finally fell into financial difficulties, followed by a trigger some such as: production costs soared, severe operating conditions, fell the question, these adverse factors are often seriously affected the company's investment behavior and efficiency. In contrast, no financial difficulties for good enterprises, they are all the investment decisions are very reasonable and the investment efficiency is very high. Internal control as a enterprise can realize the business objectives, strengthen the enterprise information disclosure quality, ensure the security of the assets, improve the efficiency of the operation, can greatly improve the investment efficiency of enterprises. So, to explore the financial difficulties, the relationship between internal control and corporate investment efficiency no matter is of great significance both in theory and reality.This article selects 2005 to 2014, the Shanghai and shenzhen a-share listed companies as research samples, to study the effects of financial distress on the efficiency of the enterprise investment, the internal control is changed the financial difficulties of the influence of the enterprise investment efficiency, thus further analysis under the nature of property rights, relative to the non-state-owned enterprises, state-owned enterprises in the financially troubled company investment efficiency, and whether by strengthening the internal control can change the financial difficulties of the role of investment efficiency. This paper on the asymmetric information theory, principal-agent theory and put forward several assumptions on the basis of free cash flow theory; Secondly design the financial difficulties, the relationship between the internal control and corporate investment efficiency of relevant regression model; Again using Stata software such as descriptive statistics analysis of the main variable to; Finally come to a conclusion on data regression analysis, and reliable Suggestions are put forward.In this paper, through a series of empirical research draws the following conclusion: financial distress and negatively correlated with the investment efficiency of enterprises, the relationship between the financially troubled enterprises investment efficiency is generally low, characterized by excessive or insufficient investment; Internal control to improve the financial difficulties and negative correlation between the investment efficiency of businesses, financial distress enterprises to strengthen internal control after the investment efficiency will be improved; Relative to the non-state enterprises, financially troubled state-owned enterprise investment efficiency is lower, by strengthening the internal control will also be able to increase the number of small investment. According to the above conclusion is put forward to get rid of financial difficulties, strengthen internal control, the Suggestions to improve the investment efficiency of enterprises.