Institutional Environment,Government Subsidy And Corporate Inefficient Investment

Investment activities are an important part of business activities,and efficient investment is a powerful evidence for the rationality of enterprise's resource allocation.At present,China is in the critical period of industrial transformation and upgrading.The well-performed market system has not been fully established.The investment behavior of enterprises has been influenced by many aspects of external system environment.The phenomenon of inefficient investment is prevalent.Government subsidies for the enterprise's investment activities play an important role as stimulus and guidance.So,will subsidies have different impact on the efficiency of business investment of enterprises with different nature of the ownership?In different institutional environment,will the impact of government subsidies for the efficiency of business investment be different?In view of this,this paper choose the impact of government subsidies on the efficiency of investment as the object of study.The second chapter summarizes the existing researches.The third chapter makes theoretical analysis and then come up with the hypothesis.On the basis of principal-agent theory and information asymmetry theory,this paper divides the inefficient investment behavior into over-investment and under-investment,and analyzes the different impact the government subsidy have on the investment efficiency of enterprises with different ownership.This paper then adds the external institutional environment factors,and analyzes the different effect of government subsidy on the efficiency of enterprise's investment under different institutional environment level,and come up with the hypothesis of this paper.In the fourth chapter,this paper puts forward the empirical research plan.This paper choose sample of A-share listed companies from 2007 to 2015 after the implementation of the new accounting standards and obtains 12520 valid sample data after data screening.This study obtain the required data from CSMAR database and the financial report downloaded from the Cninfo.Based on the existing theory and research we establish the model,using Excel to sort out the data and using SPSS22.0 and Statal2.0 for testing the relationship between government subsidies and business investment efficiency.In fifth Chapter we try to explain the empirical results based on descriptive statistical analysis and regression Analysis.On the basis of theoretical analysis and empirical test,this paper draws the following conclusions:The government subsidy has a significant effect on the investment efficiency of the enterprise.On the one hand,government subsidies can exacerbate the over-investment behavior of SOEs,but there is no significant impact on the under-investment behavior of SOEs.On the other hand,government subsidies can exacerbate the under-investment behavior of non-SOEs,but have on significant impact on the over-investment behavior of non-SOEs.In the areas with poor institutional environment,government subsidies exacerbate over-investment behavior and under-investment behavior of SOEs,and government subsidies have exacerbated the under-investment of non-SOEs.In the areas with better institutional environment,government subsidies have no significant effect on inefficientinvestment behavior of SOEs and non-SOEs.In summary,government subsidies have a positive effect on over-investment behavior and under-investment behavior of SOEs,while government Subsidies only have a positive impact on the under-investment of non-SOEs.According to the research conclusion,government and enterprises can try these three methods to improve the outer economic environment and investment efficiency,three policy suggestions are as follows:First,establish a well-performed government subsidy mechanism;Second,change the government functions,strengthen the legal system and financial system;Third,improve the internal governance mechanism,strengthen the supervision and incentives for managers.