Non-founder CEOs And Investment Efficiency

Investment is an important booster of enterprise development.The rapid development of China's economy depends on investment.Under the new economic normal,how to achieve economic sustainability has also become the focus of attention of the new leaders.At the same time,the state strongly supports and attaches great importance to private enterprises.In the 19 th report of the communist party of China,general secretary Xi Jinping for the first time put forward " support the development of private enterprises".In the new economic situation,how to invest,how to correctly grasp the efficiency of investment,has become the key to the development of private enterprises.In private enterprises,the founder usually held a position as CEO in the early stage of enterprise development.With the development of enterprises,many private entrepreneurs pay more and more attention to standardized management,choose to give up this position.Non-founder CEO often has a more professional management background,seems to bring a better financial decision-making for the enterprise,but at the same time,the choice of non-founder as CEO brings serious agency problems.So,can the non-founder CEOs bring better financial decision-making to the enterprise? Based on this,this paper studies the relationship between non-founder CEOs and investment efficiency,and whether there are differences in the impact of non-founder CEOs on the investment efficiency of private enterprises under the different corporate governance mechanism.Further,this paper discusses the economic consequences.This paper is divided into the following six parts:Part one: Introduction.This part mainly introduces the background,significance,main methods and innovation of the research.Part two: Literature Review.This part mainly combs the research literature in related fields,summarizes the domestic and foreign scholars' research focus and shortcomings related to the theme of this paper,and determines the research direction of this paper.Part three: Theoretical Analysis and Research Hypothesis.This part mainly sorts out the theoretical basis related to the theme of this paper,then puts forward the research hypothesis on the basis of theoretical analysis.Part four: Sample Selection and Research Design.This part includes defining variables,building models,selecting sample data,sample descriptions,etc.Part five: Descriptive Statistics and Empirical Test.This part uses Stata 13.0 to analyze the sample data.It includes descriptive statistics,correlation analysis,and regression analysis of all samples and grouped samples.Finally,the reliability of the research conclusion is guaranteed by robustness test.Part six: Research Conclusions,Suggestions,Shortcomings and Prospects.This part summarizes the main research results,puts forward some enlightenment,and illustrates the limitations of the research and the future research prospects.This paper takes the private enterprises listed in Shenzhen stock exchange after 2004 as the research object,studies the relationship between CEOs' non-founder identity and investment efficiency,and draws the following conclusions:(1)When private enterprises choose non-founder CEOs to manage the enterprise,the non-founder CEOs will use the information asymmetry with the founder shareholders to make inefficient investment.(2)The relationship between non-founder CEOs and investment efficiency is not significant in the enterprises with large proportion of executive shares.In the other enterprises,the relationship between non-founder CEOs and investment efficiency is significantly negative.Therefore,increasing the proportion of executive shareholding will alleviate the agency problem between non-founder CEOs and founder shareholders and improve investment efficiency.(3)The relationship between non-founder CEOs and investment efficiency is less significant in enterprises with high internal control quality.In the other enterprises,the relationship between non-founder CEOs and investment efficiency is significantly negative.Therefore,when enterprises hire non-founder as CEO,improving the quality of internal control will improve investment efficiency.(4)The relationship between non-founder CEOs and investment efficiency is not significant in the enterprises audited by the Big4 accounting firms.In the other enterprises,the relationship between non-founder CEOs and investment efficiency is significantly negative.Therefore,improving audit quality can alleviate the inefficient investment of non-founder CEOs.(5)Further analysis shows that the relationship between non-founder CEO sand investment efficiency is not significant for enterprises whose CEO with high education degree.The unreasonable investment of non-founder CEOs will have a negative impact on the performance of the enterprise.The contributions made in this paper are as follows:(1)This paper manually collects,sorts out and supplements the personal characteristics of the CEOs of private enterprises listed after 2004,such as whether the CEOs from 2011 to 2016 has the founder identity,which expands the existing data.(2)Referring to the existing literature,using indirect definition method to define the enterprise non-founder CEOs,provides a new idea for the study of nonfounder CEOs.(3)The domestic literatures about founders and investment efficiency are mostly concentrated in family enterprises.This paper studies the impact of CEOs' non-founder identity on investment efficiency,then puts forward relevant governance ideas.