Government Control,Investor Sentiment And Corporate Overinvestment

The relationship between the government and the market is an important institutional environment and constraints that affect corporate investment decisions.With the continuous development of China's socialist market economy,corporate investment,especially enterprise investment under government control,has become an important driving force for rapid economic growth.Therefore,it is of practical significance to study the influence of the relationship between the government and the market on corporate investment decisions.Many research literature and economic facts show that investor sentiment can affect a company's investment outcomes.How does this effect change under different constraints?How does the institutional environment affect investor's investment outcomes by interfering with investor sentiment?The institutional structure of the Chinese capital market provides a "natural laboratory" for this study.Under China's unique market economy system,emerging and transformation are two characteristics of listed companies in China.In fact,they are largely controlled by the government because of the motives and capabilities of the government to influence listed companies.This paper takes China's special institutional environment as the background and the government's control over the market and enterprises as the starting point.In the process of investor sentiment further affecting the investment results of the enterprise by affecting the manager's emotions,the government control system background is embedded and the government control is analyzed.The institutional environment has an intervention and regulation role for corporate investment.Based on the principal-agent theory and asymmetric theory,Taking Shanghai and Shenzhen stock markets in 2010 as examples,this paper studies the pricing methods of stock options in China.using the previous period of six months.The cumulative monthly stock returns are empirically analyzed as a surrogate variable for investor sentiment,and further introductionof government control factors to study the impact of differences in the nature of property rights on corporate over-investment and investor sentiment.This article is divided into the following six sections:The first part,the introduction,mainly expounds the research background,purpose,theoretical significance and practical significance of the subject,and puts forward the research framework and methods of the subject.The second part is a review of literature research.The research literatures on government control,investor sentiment and corporate investment results are reviewed,which provides a theoretical basis for subsequent empirical research.This paper reviews the empirical research literature on government control and corporate investment outcomes,investor sentiment and corporate investment outcomes,providing empirical evidence for empirical research.The third chapter carries on the theoretical analysis and the definition to the related concepts.The fourth part,research hypothesis and research design.It mainly includes research hypotheses,variable definition,model construction,sample selection and data analysis methods.This part is the key part of this paper.The fifth part is data analysis and results.Based on descriptive analysis,correlation analysis,regression analysis and robust estimation,hypotheses and data structure are put forward.The sixth part is the innovation and empirical results of this paper.and based on the conclusions obtained,relevant suggestions are put forward for corporate governance and investment decision-making under the background of government control.Through analysis,the following conclusions can be drawn:(1)investor sentiment is positively correlated with corporate investment behavior.(2)Listed companies with higher government control are more likely to over-invest.(3)Companies controlled by the government are not significantly more sensitive to investor sentiment than companies that are not under government control.(4)The influence of government control on investor sentiment and investment results,"manager sentiment" may play a role as an intermediary channel.At the end of this paper,based on the empirical results,the company and the government regulatory authorities put forward some policy recommendations,hoping to promote relevant practices in the field of corporate governance and improve relevant policies and regulations.For the study of investor sentiment,the current literature mainly focuses on the influence of investor sentiment on corporate investment behavior,and there is very little research on the investment results of enterprises.This paper studies the investor's emotions in the excessive influence of enterprises.The institutional background introduces the nature of property rights.The contributions of this paper are:(1)Verification of relevant research literature on corporate investment results,enriching the theoretical framework.(2)Provide empirical evidence for microscopic transmission mechanisms for studying government behavior affecting economic development.