An Empirical Study On Board Social Capital,Board Faultline And Investment Efficiency

As an important part of the socialist market economy with Chinese characteristics,private enterprises have become an indispensable strong driving force for China's national economic development.Private enterprises from the beginning of nothing to now as many as 20 million,from small enterprises as the main to now more and more private enterprises into the ranks of large enterprises,from focusing on the domestic market to today's global,China's private enterprises have undergone tremendous changes in just 40 years.Zhejiang Province has ranked first in the list of the top 500 private enterprises in China for many years,and is undoubtedly a major province of private economy.Under the background of economic transformation nowadays,the new economy represented by new industries,new formats and new business models has emerged.Under the new situation,Zhejiang private enterprises have shown strong vitality for development on the one hand,and are also facing many challenges on the other.The board of directors is one of the important decision-making bodies in enterprises,and investment decision-making is an important part of business decisionmaking.Both of them play a decisive role in the development and transformation of enterprises.With the establishment of the theoretical system of social capital,more and more attention has been paid to the research on the social capital of the board of directors.The social capital of the board of directors originates from the internal or external relations owned by the members of the board of directors and the collection of potential or actual resources brought about by these relations.Inspired by this,we empirically test the relationship between board social capital and investment efficiency.At the same time,the possible negative effects caused by the heterogeneity of board members are also a hot issue in the field of board governance.Board members have different educational backgrounds,functional backgrounds,tenure and other characteristics.On the one hand,they can provide diversified information and resources for enterprises and enrich the social capital of the board.On the other hand,due to the increasing heterogeneity of the board of directors and the different attributes among board members,there will be small groups within the team,which will lead to different decision-making groups,which may eventually lead to contradictions and differences within the board of directors,resulting in disharmony and division within the board of directors,and aggravated.The board of directors has the risk of poor communication and decision-making conflict.This paper uses the new concept of the board of directors fracture zone to measure the degree of the board of directors split,and empirically tests the relationship between the social capital of the board of directors,the board of directors fracture zone and investment efficiency.The investment activities of enterprises can not be separated from the support of resources.In view of the resource supply function of the board of directors,this paper introduces the resource acquisition ability as an intermediary variable,breaks through the traditional input-output paradigm,and reveals the black box of the mechanism of the board of directors' social capital influencing investment efficiency.Based on social capital theory,resource dependence theory and social identity theory,this paper selects 776 sample enterprises of Zhejiang private listed companies from 2013 to 2016 for empirical analysis.Firstly,the social capital of the board of directors is calculated according to political connections and social networks;the investment efficiency of enterprises is calculated through mature models;according to the formula of the board of directors fracture zone,the strength of the board of directors fracture zone is calculated by using R language through three indicators: the educational background of the board members,the term of service and the type of the board members.Through the principal component analysis of the relevant data in the financial statements,we can calculate the resource acquisition ability.Secondly,descriptive statistics,correlation analysis,multi-collinearity analysis,adjustment effect test and intermediary effect test are carried out to verify the hypothesis.Finally,according to the empirical test results and the relevant actual situation of Zhejiang private listed companies,management suggestions are put forward,and in view of this research.The shortcomings of the study and suggestions for improvement are put forward.The conclusions of this paper are as follows:(1)the social capital of board of directors is significantly positively related to investment efficiency.Political linkages help to weaken the potential financing constraints of Zhejiang private listed enterprises,thereby improving the efficiency of investment.Social network can help enterprises obtain useful key industry information and scarce resources from outside,provide effective support for the board of directors to implement investment decisions,weaken the impact of risk and uncertainty of external environment on investment activities,and help enterprises improve investment efficiency.(2)the fracture zone of the board negatively regulates the positive correlation between political connections and investment efficiency.A strong break zone of the board of directors will hinder the implementation of the decision-making function of the board of directors,which is not conducive to improving the efficiency of investment and weakening the positive impact of political connections on the efficiency of investment.(3)resource acquisition capability plays a mediating role between the board's social capital and investment efficiency.The social capital of the board of directors is conducive to improving the ability of enterprises to acquire resources,which has a positive impact on the efficiency of investment.The policy suggestions put forward in this paper are:(1)encourage board members to establish extensive contacts with the outside world;(2)optimize the composition of the board of directors;(3)private enterprises should strengthen communication with the government.