Product Market Competition?the Level Of Investor Protection And Investment Decision Space

Investment decision making is very important to the development of the enterprise,and the correct investment decision will bring more positive cash flow and good development space for the enterprise.In this paper,the difference between the return on investment and the cost of capital is defined as the investment decision space of the enterprise to measure the future investment space and development potential of the enterprise.And the level of investor protection is not only a profound impact on the development of capital market in our country,,will also produce influence to enterprise's investment decision.The higher the level of investor protection,the role of supervision on the management incentive,will reduce its work slack to work harder in order to reduce its interests are not violated,thus will bring a higher return on investment for the enterprise.Correspondingly,the higher level of investor protection will increase the appropriation cost of large shareholders,reduce the degree of embezzlement,increase the capital market financing amount,and reduce the capital cost of the enterprise Therefore,investor protection level may promote the investment decision-making space of enterprises.In addition,as an important external governance factor,the company must also pay attention to the important influence of external factors on corporate governance.Under the fierce competition of product market,the lower operating profit margin of the enterprise makes the enterprise make more rational investment decision.However,most of the current literature discussion points centered in small and medium-sized investors protection level and the function of capital market for this effect to the enterprise to bring the influence of external financing of the cost of capital,but ignore the product market competition as a kind of external governance mechanism of the effect of regulation.From 2012 to 2016 China's a-share listed companies as samples,to investor protection level as the breakthrough point,to explore and examine product competition in the market to do an external governance mechanism,the level of investor protection and enterprise investment decision of spatial correlation between impact study.Finally,the following empirical conclusions are obtained through descriptive statistics,correlation analysis and multiple regression.To verify the above assumptions,the following conclusions are drawn:(1)the higher the investor protection level in the reporting period,the greater the enterprise investment decision-making space in the next year;(2)compared with state-owned enterprises,the relationship between investor protection level and investment decision space of private enterprises is more obvious.(3)product market competition is positively regulating the relationship between investor protection level and enterprise investment decision-making space(4)in this regulatory role,private enterprises are more obvious.Finally,according to the conclusion of this paper,it is suggested that the implementation of investor protection system should be strengthened,and the government should accelerate the pace of market-oriented reform.