The Relationship Between Independent Directors Of Universities And Enterprise Over-investment

In recent years,it is a common practice for Chinese companies to employ teachers from universities as independent directors.The original intentions of the independent directors are to solve the problem of insider control and protect the interests of investors from being infringed.However,in the process of investment decision-making,the management may be tempted by self-enrichment,resulting in over-investment behaviors.So,is it possible for independent directors of universities which are favored by the companies to perform their duties to restrain over-investment behaviors of the companies? In addition,with the development of behavioral finance,scholars have realized that the background characteristics of the senior management team such as age,gender and occupation background will affect the behavior of people.So,independent directors as an important part of the senior management team,How does the characteristic difference between those affect the over-investment behavior?These are worth discussing.Based on the China's institutional background and the existing theoretical researches,this paper combines the normative qualitative analyses with the empirical quantitative researches to try to discuss the following three issues: Firstly,whether college scholars who form the main component of independent directors have played a positive role in curbing over-investment behaviors of the companies? Secondly,how does the heterogeneity of independent directors of universities affect over-investment behaviors? Thirdly,as the "vanguard" in academic researches,do authoritative independent directors of universities play more signal or supervisory roles in corporate governance?Based on the sample of A-share listed companies in China during 2010-2015,this paper empirically tests the influence of independent directors of universities on over-investment behaviors of the companies.The results show that the more independent directors of universities,the less over-investment.On this basis,according to the "upper echelons theory ",the paper in-depth studies the correlation between the individual characteristics of independent directors of universities and over-investment behaviors.As a result,it is found that independent directors of universities located in the same province as the employed companies and with technical background are helpful to restrain the over-investment behaviors of the companies.However,the independent directors of universities who have the authority or the administrative duties at the same time contribute to the over-investment behaviors.In addition,this paper takes the resignation of directors as the starting point,and finds that the authoritative independent directors of universities play the role of signal rather than supervisory,suggesting that they tend to "vote by foot" rather than actively practice the governance roles in investment decisions to avoid the risk of reputation damage.The enlightenment of this study is that it can understand the investment behaviors of the companies from the perspective of the personal characteristics of the independent directors of universities,and it is also of guiding significance for the continuous improvement of the appointment system and management system of independent directors.This paper is divided into six parts: the first part is the introduction.This part mainly introduces the background,significance,purpose,content,method and framework of this paper.The second part is the literature review.Combined with the research theme of this paper,this part summarizes and analyzes the related literature at home and abroad from two angles,which are independent directors and corporate governance on investment efficiency.The third part is the theoretical basis.This part firstly expounds the meaning of independent directors of universities and the development of independent director system in China.Then it summarizes the meaning of over-investment and the development of company investment theory.Finally,based on the upper echelons theory,resource dependence theory,principal-agent theory and information asymmetry theory,this paper analyzes the mechanism of independent directors of universities on over-investment behaviors of the companies.The fourth part is theoretical analysis and research hypothesis.This part firstly deduces the relationship between the independent directors of universities and the over-investment behaviors of the companies.Then,based on the "upper echelons theory ",the paper further puts the position and authority of independent directors of universities into the research categories,and puts forward the other two basic assumptions.After completing the process of the above logical deductions and hypotheses proposed,the specific research and design session are carried out.The fifth part is empirical test and analysis.Based on the constructed research model,this part empirically tests and concludes the relationship between independent directors of universities and over-investment behaviors through descriptive statistics,multiple regression analysis,further analysis and testing,and robustness test.The sixth part is research conclusions and policy recommendations.