Research On The Relationship Between Institutional Investors' Shareholding,Financial Flexibility And Over-investment

At this stage,China is in the new economic normal period,and the economic development trend has changed from extensive form to intensive form.However,a series of government policies to stimulate the economy in the past few years have led to the serious problem of overcapacity in China,so that Chinese economy is now facing downward pressure.Enterprises'investment behaviors will have an important impact on micro-economic subjects' sustainable development and resource allocation's efficiency in the whole society.Due to the information asymmetry and principal-agent problems in Chinese imperfect capital market,the phenomenon of over-investment by enterprises is very common.How to improve investment's efficiency has been an important topic of academic research.With the increase of the uncertainty of external environment,enterprises' resilience plays a strategic role in guiding enterprises' sustainable development.From a financial perspective,through the dual attributes of financial flexibility's"prevention" and "utilization",enterprises will realize the goal of preventing capital chain rupture to help enterprises cope with environmental uncertainty and seize future investment opportunities,thus contributing to competition.However,when enterprises maintain a high level of financial flexibility,they further intensify the principal-agent conflicts and make the management have the tendency of over-investment for the sake of maximizing self-interest.Therefore,in recent years,scholars have begun to study over-investment problem from financial flexibility's perspective.However,most previous studies have analyzed the mechanism of action on over-investment from financial flexibility's single source.In order to make up for previous research's shortcomings,this paper will more comprehensively explore the path of financial flexibility on over-investment.At the same time,under the implementation of a series of policy objectives such as“extraordinary development of institutional investors",the attention of our government and the public to institutional investors' participation in corporate governance and the stabilization of market functions has generally increased,and there are significant differences in institutional investors' investment concepts,funding sources and so on,so different types of institutional investors to the company's governance effect will also have certain differences,about how to actively guide in different types of institutional investors participating in corporate governance is worth our exploration.In addition,the existing research lacks of incorporating the external governance mechanism of institutional investors into the research framework of financial elasticity and over-investment,which is a problem that needs to be further discussed in this paper.This article on the basis of the existing classical theory,with the Shanghai and Shenzhen a-share listed companies from 2013 to 2016,using the combination of theory and empirical research method,to verify the effectiveness of the proposed in this paper about the institutional investors holding,financial flexibility and over-investment related hypothesis,the relationship among the following conclusions:(1)Financial flexibility's change of enterprises and over-investment show the same direction of change;(2)There is a significant reverse trend between the institutional investors' shareholding ratio of enterprises and the over-investment.After classifying institutional investors from qualitative and quantitative perspectives,we found that compared with the dependent and transactional institutions,independent and stable institutional investors holding enterprises can significantly inhibit over-investment' s phenomenon;(3)After institutional investors holding enterprises can be significantly reduced by unreasonable financial flexibility reserve caused by over-investment,and compared with the dependent and transactional institutions,independent and stable institutional investors holding enterprises after all can significantly promote the over-investment caused by the unreasonable financial flexibility reserve.This paper's conclusion has certain theoretical and practical significance for Chinese listed companies to maintain a moderate financial flexibility awareness and for policy departments to improve the supervision of institutional investors under the background of the new normal economy.