Government Control?“4 Trillion” Investment Plan,and Firm's Over Investment

The investment efficiency of enterprises is always the one of the most important factors that affect the value of enterprises.And for enterprises,investment efficiency has always been the focuses of academic research.At the same time,the relationship between the government and the markets has always been one of the core issues in economics.The government can optimize the allocation of resources through effective policies,but also could cause the failure of the market mechanism due to improper intervention.In China's transitional market economy,the role played by the government's which is called "visible hand" can not be ignored.The industrial policies promulgated by the government,especially under the background of the financial crisis in 2008,are the impact of the "4 trillion investment plan" of economic stimulus policies promulgated by the government on the efficiency of corporate investment? These are all worth discussing topics.The existing literature shows that factors such as information asymmetry,principal-agent problems,manager characteristics and other factors will affect the enterprise's investment behavior,which often results in the enterprise's investment behavior deviating from its optimal investment,including the lack-investment and overinvestment inefficient investment behavior.What's more,the investment efficiency of enterprises will be reduced.This article mainly studies the connect among the government control?economic policy(specifically refers to the "4 trillion investment plan" of the economic stimulus policy issued under the background of the 2008 financial crisis)and the investment efficiency of enterprises.Using 2003-2016 A-share non-financial listed companies as sample,"government control" and "4 trillion investment plan" as the external shocks,this article studies and discuss the relationship among "government control","4 trillion investment plan" and the investment efficiency of enterprises.In other hand,this paper starting from the role of "4 trillion investment plan" further verifies the relationship between "4 trillion investment plan" and “the investment efficiency of corporate under the different control of governments.The empirical results show that:(1)Economic policy also has a significant impact on the investment efficiency of corporates.This is mainly reflected in the fact that during the implementation of the "4 trillion investment plan",the inefficient investment behaviors of over-investment in enterprises are more pronounced and the investment efficiency is lower.(2)During the implementation of "Four Trillion Investment Plan",state-owned enterprises had more obvious overinvestment behaviors than non-state-owned enterprises,resulting in lower investment efficiency.(3)During the implementation of the "Four Trillion Investment Plan," state-owned enterprises under the ten major industries supported by it are more prone to over-investment and inefficient investment.During the implementation of the "Four Trillion Investment Plan," state-owned enterprises which increased their bank loans had more obvious overinvestment behaviors than other enterprises,and the investment efficiency was relatively low.During the implementation of the "Four Trillion Investment Plan," state-owned enterprises with more government subsidies have more obvious overinvestment behaviors than other enterprises,and the investment efficiency is lower.This article enriches the research on governance mechanism of enterprise investment efficiency,economic policy and other related fields,and at the same time provides a new research perspective on the relationship between “government control” and “investment efficiency of enterprises” under the background of "four trillion investment plan".On the other hand,this paper provides the economic consequences evidence about the "4 trillion investment plan".