Environmental Uncertainty,Internal Control And Insufficient Investment

Investment decision-making is the core of corporate financial decision-making,which is directly related to the corporate value and growth opportunity.At the same time,investing activity is one of the three carriages to stimulate the growth of national economy,and efficient investment is of great significance for the smooth operation of the national economy.However,in recent years,the macroeconomic situation seems erratic,and the micro-market environment is also unpredictable.In the context of a high degree of environmental uncertainty,the investment behavior of enterprises has also been distorted to some extent.Statistics show that the companies' willingness to invest is declining;low investment efficiency and underinvestment problem are gradually highlighted.Whether environmental uncertainty is the culprit of underinvestment has been an issue worthy to be discussed.Internal control which has attracted increasing social attention is the main tool of internal governance.It plays a pivotal role in protecting the efficiency and effectiveness of business.Therefore,seeking solutions to insufficient investment under environmental uncertainty with the entry point of internal control has positive practical significance.Based on the analysis of relevant data of non-financial listed companies during 2011-2015,using normative research and empirical research comprehensively,this thesis employs principal-agent theory and information asymmetry theory to discuss the influence of environmental uncertainty on the enterprises' underinvestment.At the meanwhile,this thesis takes internal control into the research framework,in order to examine whether high-quality internal control can play a certain role in regulating the relationship between the two variables.This thesis further compares the relationship between internal control and insufficient investment under environmental uncertainty in companies of different property nature,so as to provide valuable suggestions on improving investment efficiency for different companies.Closely focused on the theme of thesis,it is divided into six parts as follows.The first part is the introduction,which introduces the issue background and analyzes the research value,puts forward the main contents and summarizes the research ideas,defines the crucial concept involved,expounds the research methods and innovation of this study,outlines the structure frame of this thesis.The second part is the literature review,which comprehensively combs the domestic and foreign research results about environmental uncertainty,internal control and inefficient investment,reviews the existing academic discoveries,and then shows the research perspective and direction.The third part is the theoretical basis and hypotheses,which mainly introduces the principal-agent theory and information asymmetry theory.Then,the hypotheses of this study are raised according to the related theoretical analysis.The fourth part is the empirical research design,which lays a solid foundation for the empirical analysis.In this chapter,the corresponding models are constructed,relevant variables are set,sample selection and data source are introduced in detail.The fifth part is the empirical results and analysis.After defining the underinvestment sample as the basis of the follow-up study,descriptive statistics,correlation tests and the multiple linear regression are conducted to provide data support for this thesis.In addition,a robustness test is carried out aimed at ensuring the robustness of results.The sixth part is the research conclusions and policy proposals,in which the main conclusions are drawn in accordance with the empirical results,and then the reasonable policy suggestions are put forward based on conclusions.Also,the limitations of the study and the future prospects are pointed at last.It is found that environmental uncertainty can exacerbate the degree of underinvestment,which leads to the investment inefficiency of enterprises.High-quality internal control can reduce the negative impact of environmental uncertainty on investment efficiency.What's more,compared with private enterprises,high-quality internal control in state-owned enterprises can inhibit insufficient investment under environmental uncertainty more significantly.According to the results of this research,such following recommendations are developed:(1)The government should strive to create stable and healthy economic environment,enhance the transparency and sustainability of economic policies,eliminate the misunderstandings and concerns of entrepreneurs,so as to provide a broad investment platform for enterprises.(2)Enterprises should carry out flexible strategies,take the initiative to embrace and lead the environment changes,and seek new competitive advantages in the changing market.(3)To improve and strengthen the internal control of enterprises.(4)To promote the establishment of professional manager system in state-owned enterprises.