Research On The Impact Of Private Equity Funds On Inefficient Investment

Since reform and opening-up,China's capital market has been developing rapidly.However,in such a background,there is a serious and prominent problem of inefficient investment in listed companies.Inefficient investment is a kind of irrational behavior,refers to an investment decision-making behavior that does damage the company's long-term interests,mainly manifested as excessive investment and inadequate investment.On the one hand,because of the widespread separation of ownership and control rights of Listed Companies in two,company managers tend to pay more attention to personal interests,free cash flow will tend to invest in more projects than distributed to shareholders,resulting in excessive investment behavior.On the other hand,due to information asymmetry problems seriously in the listed companies,companies often give up can bring long-term benefits to the company's investment projects because of the free cash flow shortage plus the high cost of financing problems,resulting in insufficient investment behavior.On the basis of above analysis,the research first looks back the relevant research's results have been summarized,and then analyzes from the principal-agent theory,asymmetric information theory and contract theory,finally construct the non efficiency investment measure model,an empirical study on the influence of non efficiency investment and private equity investment fund model.The results show that,there are private equity funds to participate in the company's excessive investment and insufficient investment behavior can be suppressed,the proportion of investment shares and private equity investment fund holds higher,more able to inhibit over investment company.Therefore,the research consider that China's listed companies can improve the principal-agent conflict and information asymmetry problem by taking advantage of private equity investment funds' supervision,certification role and relation network,thereby inhibiting the company's inefficient investment behavior.Finally,based on the theoretical and empirical results,this paper puts forward some suggestions,hoping to provide some help for China's listed companies to curb inefficient investment behavior,and promote the development of the company.