Research On Over-investment And Enterprise Value In The Perspective Of Corporate Governance

In the context of “The New Normal of China’s Economy”,Investment is still an important source of value creation.From the micro aspect,as one of the important activities of financial management,investment is a key part of enhancing corporate value.From the macro aspect,investment is one of the “troikas” that drives economic growth and provides a source of China’s economic development.However,many scholars have proved that Chinese enterprises do have excessive investment phenomenon.Investing in projects with NPV<0,which will bring a series risks to the production and operation of enterprises at the micro aspect,and deviate from the goal of maximizing corporate value;The level will lead to waste of resources and hinder the overall development of the national economy.Therefore,alleviating excessive investment and corporate dilemma have become an urgent problem to be solved.Enterprise investment decision-making is not an independent behavior,It is often influenced by many factors.The problems of principal-agent and information asymmetry of modern enterprises,make managers have incentives to excessive investment and other inefficient investment decisions,.however,corporate governance as a corporate The institutional arrangements for the powers,responsibilities,and interests of the board of supervisors,management,and stakeholders can be explored in terms of whether they can play a regulatory role in over-investment and corporate value relationships.This paper analyzes the current development status of China’s investment and national economy,and discusses the impact mechanism of corporate governance between over-investment and enterprise value.In the literature review section,the literature on corporate governance,over-investment and corporate value is described in detail,and then through the related concepts and Management Defense Theory,Principal-agent Theory,Information Asymmetry Theory and Stakeholder Theory.The main hypothesis of this paper is to explore the impact of on over-investment and corporate value,and deeply study the regulatory role of corporate governance.On this basis,this paper selects the data from 2008-2017 of listed companies in the Transportation industry for empirical analysis,using the Richardson(2006)model to measure over-investment.In order to have a better measure the regulation of corporate governance,this paper starting from the value creation-oriented corporate governance,it is divided into internal governance mechanisms: Size of the Board directors,Size of Supervisors,the proportion of Independent directors;the External Governance mechanism: External audit opinions and Social responsibility report scores.This paper takes the listed companies in the tTransportation industry as the research object,and uses the correlation analysis and regression analysis methods to conduct in-depth research.The empirical research of the model verifies the hypothesis of this paper.The conclusions are listed:(1)Over-investment is negatively correlated with Corporate value.(2)The expansion of the Size of the Board directors and the Supervisors can alleviate the negative correlation between over-investment and corporate value.The category of adjustment variables is a semi-regulated variable.Heterogeneity test results show that the expansion that the board of directors and the supervisors of private enterprises has a stronger mitigation effect on the relationship between overinvest and corporate value;(3)Independent directors do not have a regulatory effect on excessive investment and corporate value(4)External audit opinion and Social responsibility score can alleviate the negative correlation between overinvestment and corporate value,and the adjustment variable type is semi-regulated variable.Heterogeneity test results show that the external audit opinion of private enterprises is more obvious than that of state-owned enterprises,but the Social responsibility score has no adjustment effect.Finally,based on the conclusions,this paper puts forward suggestions on the status of over-investment and corporate governance,which provides reference for the research in this field.