Product Market Competition,Corporate Governance And Investment Efficiency

Investment efficiency is the main problem in our country.Non-efficiency investment not only leads to the decrease of operating profit and profitability,but also damages the capital market value of enterprises.In terms of quantity,there are many enterprises with insufficient investment,but the degree of excessive investment is more serious.At present,China's economic development has entered a new normal.Relying solely on investment to promote economic development is no longer a long-term solution.Instead,we will optimize and upgrade China's economic structure,fully promote the market allocation of factors,vigorously develop new industries,and gradually solve the problems of non-efficiency investment and overcapacity in traditional industries.Currently,China is in the period of economic transition,and in this period the research on how to promote the efficiency of investment in listed companies has become one of the focus points of academia and policy makers.Existing literature mainly from the ownership structure,board characteristics,executive incentive such as corporate governance structure to study the efficiency of investment,the results show that single one mechanism function of the efficiency of investment.Most documents have taken into account the internal governance mechanism that affects investment efficiency,and have often ignored the impact of external economic environment(such as product market competition)on investment efficiency.In view of the shortcomings of existing researches,this paper,through the construction of supervision mechanism and incentive mechanism index,measures the corporate governance level,and divides the non-efficiency investment according to the internal mechanism of its formation into the intention and operational non-efficiency investment,and combines the internal and external environment that affects the efficiency of enterprise investment,and focuses on the impact of product market competition and corporate governance quality on investment efficiency.Based on the characteristics of China's market economy during the transitionperiod,this paper focuses on the impact of product market competition and corporate governance quality on investment efficiency by taking the a-share listed companies in Shanghai and Shenzhen in 2012-2016 as the research object.The following main conclusions are drawn: improving the competition degree of product market and strengthening the supervision mechanism and incentive mechanism of corporate governance quality can effectively improve the investment efficiency;In view of that impact on investment efficiency,the competition and incentive mechanism exist in the product market to replace the incentive mechanism to reduce the suppression of excessive investment.Improving the supervision mechanism of the quality of corporate governance can effectively reduce the operational non-efficiency investment of private enterprises(excessive investment by private enterprises),and strengthen the incentive mechanism to effectively curb the non-efficiency investment of state-owned enterprises(excessive investment by state-owned enterprises);At the end of the paper further studies have found that different part of the corporate governance structure influence of the efficiency of investment,which improve the proportion of independent directors and executive pay,expand the scale of the board of supervisors can inhibit the excessive investment of enterprises,and improve the major shareholders holdings chairman and general manager and board activity,both concurrently,increase the board size as it will lead to the inefficient investment behavior of the enterprise.The conclusion of this paper is still valid after the robustness test,so it can be considered that the conclusion of this paper is reliable.In this paper,the research indicates that in order to improve the present situation of the low investment efficiency of listed companies in our country,first of all,should be further intensified market competition,the government related department shall formulate strict antitrust and other relevant laws and regulations to break trade protection,to solve the problem of insufficient monopoly industry competition;Secondly,the enterprise should establish a rational corporate governance policy in combination with the market competition intensity of the external products to be faced,and actively strengthen the construction of the board of directors and the board of supervisors,and improve the incentive mechanism of the enterprise to manage theenterprise;Finally,the enterprise should be reasonable voluntary information disclosure,the enterprise about the business situation,investment opportunities,and other information to outside investors,the initiative to reduce the financing constraints,this will help the enterprise to raise more funds for investment from outside,to avoid the lack of investment.