The Allocation Of Controlrights Investor Protection And Inefficient Investment

Investment decision-making is the most important to the development of enterprises,the sensible investment decisions will bring more positive cash flow and larger development space for enterprises.However,the listed companys of our country have always been facing more or less inefficient investment problems,which has cause serious constraints in enterprise profitability and the rapid development of national economy.At the same time,as an external governance mechanism,the investor protection legislation and law enforcement level not only have a profound impact on the development of China's capital market,but also significantly affect the investment decision of enterprises.Therefore,based on the model of internal control right allocation,this paper attempts to research and evaluate the mechanism and motivation behind the inefficient investment behavior of listed companies,and then combine the external governance mechanism,namely investor protection,to study the dynamic relationship of the three varibles,so as to provide some references for the Listed Companies in China to optimize their ownership structure and safeguard the interests of stakeholders for the better regulation of investment decision-making,thus improving the efficiency of enterprise investment efficiency,and also provide some theoretical inspiration for the goverment that it is urgently necessary and important to betthe current investor protection system.In order to study the relationship between the control rights allocation,investor protection and investment efficiency,this paper starts with literature review method to systematically sort out the existing research results so as to find out the key point of this study,and then put forward the corresponding hypothesis by the theory of logical reasoning and test the hypothesis through the construction of the model and empirical analysis of the data of listed companies,finally put forward some policy recommendations and final analysis of the test results.The empirical test of this paper shows that;(1)Under dispersed shareholding model,the increase of the proportion of control can reduce the over-investment and insufficient investment of enterprise.(2)Under relative holding mode,the increase of the proportion of control can aggravate the over-investment problem.(3)Under absolute holding mode,the increase of the proportion of control can increase the over-investment and insufficient investment problem of enterprise.(4)The improvement of investor protection level can directly reduce the inefficient investment caused by controlling shareholder.(5)Under the absolute holding mode,the improvement of the investor protection level can inhibit the inefficient investment caused by the high proportion of control right.The theoretical analysis of this papershows that:When the allocation of control is in the state of dispersed shareholding model,the inefficient investment behavior of enterprises will be greatly reduced with the increase of the ratio of control.However,when there is a controlling shareholder in the enterprise,the increase of the ratio of control will aggravate the inefficient investment problem.At the same time,the improvement of the investor protection level not only can reduce the asymmetric information problems between enterprises and external investors so as to decrease the insufficient investment problem due to financing constraints,but also can alleviate the agency problems between minority shareholders and controlling shareholders,thus weakening the motivation and ability of over investment of controlling shareholder.