A Study Of Impact About Internal Governance Of Listed Companies On Gem On Over-investment

With the continued growth of the investment,the problem of enterprise’s over-investment has caused wide attention from all sectors of society.The so-called over-investment refers that a company invests in negative net present value of the non-profit project regardless of its own capabilities and growth opportunities,leading to decline in enterprise value.Why do some managers want to over-invest against the principles of investment decisions? Many studies have shown that the agency problem is the main factor that leads to over-investment phenomenon.The biggest value of corporate governance is to solve the agency problems and information asymmetry,then derive from this relationship,from the company’s internal governance perspective researching over-investment is supposed to be a good choice.Studying over-investment of listed companies on GEM is important,while systematic research is still rare to date.This article bases on the feature of listed companies on GEM and takes the R&D investment rate as the control variable.The time-to-market factor is fully considered in the over-investment model of the listed companies on the GEM.This article selects 2013-2015 data of the stock companies listed companies on GEM as the research object and uses the combined method of normative and empirical research to select the representative indicators from the ownership structure,the characteristics of the board of directors,the characteristics of the board of supervisors and the management incentive to study the influence of the internal governance factors on the over-investment.The empirical result shows that the proportion of the largest shareholder has a significant positive correlation with over-investment and the equity balance is negatively correlated with over-investment.The size of the board of directors is negatively correlated with over-investment.The degree of board activity is positively correlated with over-investment.Executive pay is negatively correlated with over-investment.In the end,this paper makes the suggestiones by introducing the institutional investors,improving the equity governance structure;adjusting the board size,perfecting the system of board meeting;perfecting the mechanism of executive pay,strengthening the link between performance bonuses and long-term capital appreciation,strives to improve the internal governance efficiency of listed companies on the GEM and inhibite the excessive investment behavior of enterprises,improve effectiveness of investment and maximize the value of enterprises.