Management Power,the Effectiveness Of Party Committee Participates In The Corporate Governance And Over-Investment

As one of the factors to drive China's economy,investment is an important support for economic development.There is no doubt that investment has always played a role in the process of China's reform to continuously boost the development of China.In the modern enterprise management that takes firm value as its core,Investment behavior is not only a kind of financial behavior,but also a means to determine the expected goal and the future value of the enterprise,an prerequisite and a guarantee of the effective financing decision and dividend policy,the basis on which an enterprise stands.High efficient investment not only can actively guide the trend of macro economy,but also effectively promote the development of microcosmic subject.Under the background of the Chinese characteristic system,the national economy which is very important to the development of the country is huge and involves all important areas of economic development.And as an important part of the national economy,the investment behavior of state-owned enterprises will not only affect the value creation of the enterprises themselves,but also affect the healthy development of the other economic entities.For a long time,inefficient investment has been one of the major problems that plagued the reform of state-owned enterprises.Moreover,considering that the degree of the over-investment in state-owned enterprises is greater than that of under-investment,and over-investment can lead to resource waste,capital mismatch and over-capacity,it has gradually become the hot research field in recent years.So,It is very necessary for both the macro-economic situation and the development of micro enterprises to analyze the causes and possible solutions of over investment in state-owned enterprises.Basing on the background that the Party Central Committee requires state-owned enterprises to enhance the capital allocation efficiency and strengthen the leadership of the party and differing from the previous literature that attributes the reason of over-investment to external government intervention,this paper takes into account that the imbalance of management power allocation in the process of the reform of state-owned enterprises and pays attention to the influence of management power on over-investment in state-owned enterprises.Besides,under the background of political system,we explore the governance effects of state-owned enterprises' Party committee on opportunistic behavior and irrational decision making behavior of management and study deeply the influence of the governance of state-owned enterprises' Party committee on the relationship between management power and over-investment.Based on the data of state holding listed companies from 2007 to 2015,we put the management power,the governance effects of state-owned enterprises' Party committee and over-investment into an analytical framework and find that:(1)in the state holding listed companies,the greater the power of the management,the greater the degree of the over-investment;(2)the governance of state-owned enterprises' Party committee can inhibit the over-investment caused by the management power;(3)at the board level,compared to the local state-owned enterprises,the governance of state-owned enterprises' Party committee has a stronger inhibitory effect on over-investment caused by management power in central enterprises;(4)with the improvement of investor protection,the inhibitory effect of governance of state-owned enterprises' Party committee on overinvestment caused by management power is further strengthened.Throughout the full text,the innovation and research significance of this paper are mainly concentrated on the following three aspects: Firstly,this paper jumps out the research framework of the previous literature on the influence of external political intervention on the overinvestment of state-owned enterprises.From the theory of management power,we analyze whether the relative centralization of management power will lead to excessive investment.Secondly,through analyzing the mechanism and action path of the Party committee's influence on the rent-seeking behavior,and further investigates the influence of the Party committee's participation in corporate governance on the relationship between management power and excessive investment,this paper extends the corporate governance theory of state-owned enterprises with Chinese characteristics,which not only provides a research background of the political system of state-owned enterprises for the application of the theory of management power,but also provides empirical evidence for the controversy over the participation of Party organizations in governance in academic circles.thirdly,In this paper,the management authority and the Party committee participation in corporate governance are included in the same analytical framework,and studying the influence of the interaction between the two on the overinvestment of state-owned enterprises is innovative in the content.It is helpful for us to understand the influence of the micro embodiment of the political system on the investment behavior of the enterprises in the course of China's economic transition,and at the same time this paper is of practical significance for the deep integration of Party building and economic activities in state-owned enterprises.To summarize,through theoretical analysis and empirical test,we expect to clear the relationship between management power and over-investment in state-owned enterprises and the influence of the governance of state-owned enterprises' Party committee to the relationship.Furthermore,we can provide reference for rationally allocating the management power,Strengthening the service function of Party committee for economic performance and improving the efficiency of resource allocation.Through the study of whether management power has an explanatory power on the efficiency of the allocation of resources in state-owned enterprises,this paper further enriches the theory of management power.At the same time,this framework extends the scope of application of management power theory from an unique perspective.