The Impact Of CFO Financial Executive Force On Overinvestment Behavior

The effective investment helps enterprises to form the scientific resource allocation and ensures a stable and substantial inflow of cash flow in the future.It is also beneficial for the enterprises to realize the goal of value increment and sustainable development.However,the influence of the international financial crisis has not been eliminated.The international market is still under recovery,and the domestic demand growth is lower.The development pattern of high economic growth with high investment growth,which led to overinvestment and excess capacity,has already not been suitable for China.How to solve the problem of overinvestment and excess capacity has already been an urgent issue.The CFO,one of the core person in the corporate governance structure,participates actively in the investment decisions.She/He also plays a significant role in curbing inefficient investment behavior.However,the supervision and advice function,which is specific to CFOs in Chinese listed companies,is affected by the CEO to some extent.As a result,the CFO financial executive force is weakened.Some research shows that the promotion of CFO into the board can improve the CFO financial executive force.Can the improvement of the CFO financial executive force effectively restrict overinvestment?And are there any differences in relationships between the CFO financial executive force and overinvestment under different property rights and analysts attention?Based on the Principle Agent Theory,the Asymmetric Information Theory,the Upper Echelon Theory and the Social Network Theory,the dissertation empirically tests the impact of CFO financial executive force on overinvestment behavior.Moreover,the dissertation examines the impact of CFO financial executive force on overinvestment behavior under different property rights and analysts attention.There are five parts in this dissertation.The first part is the introduction,which reveals the research significance based on the basic situation of real market and theoretical progress.Then it introduces the research methods,ideas,innovation and domestic and international literature reviews about the overinvestment and CFO financial executive force.In the second part,we mainly define related concepts like CFO financial executive force and overinvestment and expound the classical theories involved in this dissertation to lay the foundation for the research behind.The third part is the theoretical analysis and the research hypotheses.This part firstly introduces briefly the present situation of the overinvestment and CFO financial executive force.Then it discusses how CFO financial executive force affects overinvestment and the regulatory mechanism of the property rights and analysts attention.On these grounds,we put forward the research hypotheses.The fourth part is the empirical tests.This part builds variables and a model based on the previous research.Then it applies Excel and SAS to preproccess the data of A-stocks listed companies from 2010 to 2016 and SPSS to make corresponding analysis and linear regression,and so on.The fifth part is conclusions,suggestions,shortcomings and prospects.The conclusions show(1)CFO financial executive force has a significantly passive correlation with overinvestment after the promotion into the board;(2)The adverse effect of CFO financial executive force on overinvestment is more significant in the state-owned enterprises.(3)The adverse effect of CFO financial executive force on overinvestment is more significant in the state-owned enterprises controlled by local govemments.(4)The adverse effect of CFO financial executive force on overinvestment is more significant under high analysts attention.This dissertation enriches research achievements about the CFO financial executive force and overinvestment.In addition,it also provides practical ideas and references about perfecting corporation governance structure and improving investment efficiency for listed companies in our country.