Management Power,Nature Of Property And Corporate Investment Efficiency

Investment decision is one of the most important financial strategic decisions of the company.The decision-making is related to whether the company can win the advantage in the fierce market competition and it is the key factor for the growth of the company.The "13th Five-Year Plan" proposed that "effective investment" should be increased.What is "effective investment" ? Specifically,it is to invest in long-term,high-return investment projects that are in line with future development,which will surely put higher demands on the quality and efficiency of corporate investment.Competent managers will seek the best investment projects to increase the value of the company,but this is based on the assumption that "investors are rational" and "market is effective." In fact,most of the listed companies have separate ownership and management rights.Management power is the result of game between managers and shareholders.If management power is too weak,then the company's investment decisions must follow the wishes of the controlling shareholders,and thus have the chance to make inefficient decisions that hurt the interests of small and medium shareholders;if the management power is too large,it will cause information to a large extent Asymmetry,because of profit-seeking nature,management may be inclined to seek its own interests when faced with the choice between personal interests and company interests,and the motivation of this rent-seeking will increase with the increase of management power,thus the investment efficiency and value of the company may be damaged.In addition,the state-owned economy is an important part of China's public ownership economy.When the government takes the goals of economic growth,social responsibility,etc.,the state-owned enterprises often show strong incentives for intervention.When economic growth is linked to the performance of government officials,officials are motivated by political promotion goals and have a strong incentive to intervene in the investment decisions of state-owned enterprises.Therefore,in the practice,what is the relationship between the size of management power and investment efficiency? What is the relationship between the state-owned and private-owned enterprises with different property rights? This requires us to conduct theoretical and empirical research.This article mainly used the following research methods: First,the literature research method.Through reading a large number of domestic and foreign literatures,it has been found that some scholars have conducted some tentative studies on certain economic consequences of management power,but the themes mainly related to executive compensation,corporate performance and official corruption,and less involved management power and corporate management.The relationship between investment activities,diversification,and innovation capabilities is also less involved in the process of investment decision-making by the management,and what kind of approach and influence the power will have.In addition,due to the special institutional nature of China,state-owned listed companies have more advantages in resource dominance and preferential government subsidies,and the advantages of resource allocation will directly affect the results of corporate investment.Is there a difference between the relationship between management power and investment efficiency under different nature of property rights? Based on this,this paper believes that the existing research on how management power affects corporate investment efficiency can also be further explored.Second,qualitative analysis combined with quantitative analysis.This article starts from the four theories of principal-agent theory,information asymmetry theory,optimal contract theory and property rights theory,and qualitatively analyzes the mechanism of the relationship between management power and corporate investment efficiency,the mechanism of the relationship between the nature of property rights and corporate investment efficiency,and the mechanism of those three variables.Using qualitative analysis approach to discusses the correlation between management power,nature of property rights,and corporate investment efficiency.In the empirical test section,quantitative analysis is used to establish a regression model.And the empirical study of corporate sample data was conducted to confirm the relationship among the three.After the collection,collation and analysis of the relevant data,this paper uses 10124 data of A-share listed companies from 2010 to 2015 as a sample,and Richardson(2006)model is used as a reference to measure the investment efficiency of enterprises;combined with Finkelstein In the study of(1992),management power was measured from the four dimensions of organizational power,expert power,ownership power,and reputation power.Each dimension index was replaced with two variables,and then the eight variables were constructed using principal component analysis to get a management power indicator.Through empirical research methods,this paper analyzes the effect of management power on investment efficiency,and specifically analyzes the relationship between the two in the context of different equity structures.This article draws the following conclusions: First,in listed companies,the level of management power is positively correlated with the level of corporate investment efficiency,that is,management power can promote the investment efficiency of enterprises.Second,compared with private enterprises,state-owned enterprises have higher investment efficiency.Third,keeping other conditions unchanged,compared with private enterprises,the negative impact of state-owned enterprise management power on corporate investment efficiency is even more significant.On the basis of research analysis and research conclusions,two suggestions are proposed: First,the relevant departments such as the Ministry of Finance and the National Audit Office should strengthen the supervision of state-owned listed companies.Second,the government should reduce its interference with state-owned enterprises and increase the fairness of market competition.