Outside Directors’ Board Networks And Corporate Investment Efficiency

Relations is the basic feature of all economic activities,and the channel of information exchange and mutual support between people and people,organizations and organizations.In the economic society,the individual’s decision-making and behavior are affected by the network.Board network is a kind of important relationship network,which not only affect the behavior of individual directors’corporate governance behavior,but also the enterprise can obtain scarce resources and high value of information through the board networks,making the little risk but large gains investment decision.Investment behavior is one of the most important decision-making impacting the corporate development and market competition,but in our market environment due to information asymmetry and management agency problem caused by "adverse selection" and "moral hazard",corporate enable to optimize the allocation of resources,and cause the problem of inefficient investment.This paper mainly focuses on the mechanism of the relationship of the outside directors’ board networks and the investment efficiency,and the differences of two types of outside directors’effects on the corporate investment behavior through the board networks.How the board networks affect the enterprise resource allocation and investment decisions,some scholars were studied,but the results are very different,rarely consider the effect of different type of directors and the different type of board network location on board governance behavior.This paper focuses on the relationship between the outside directors’ board networks and the efficiency of investment.This study focuses on the following four questions:what is the mechanism of the influence of the outside directors’ board network on the corporate investment efficiency?Is there any difference between the board network performance of the non executive directors and the independent directors in the investment efficiency?Is there any difference between the board network central position and the board networks structure hole position?What is the effect of ownership concentration on the relationship between the outside directors’ board networks and the efficiency of investment?For the questions,this study constructs a impact path of "board networks-corporate resources acquisition effect and director governance effect-investment efficiency".Next,based on the data of main Chinese A-share listed companies from 2010 to 2015,do a empirical study on outside directors’ board network and corporate investment efficiency,and the following conclusions were obtained:(1)Independent director in the board networks’ center position and structure hole position can effectively inhibit the inefficiency investment;(2)Non-executive director in the board networks’ structure hole position can restrain the inefficiency investment effectively,but in the center position can not effectively restrain inefficiency investment.After distinguishing the two types of inefficiency investment,further found that:(3)Independent director in center position and structure hole position in the board networks can effectively restrict the intentional inefficiency investment and operational inefficiency investment;(4)Non-executive director in the board networks’ center position and structure hole position can not effectively restrict the intentional inefficiency investment,but can effectively restrict the operational inefficiency investment;(5)Corporate equity is more dispersed,the stronger the restrict effect between the center position and structure hole position of independent board networks and corporate inefficiency investment.