The Impact Of Two Types Of Agency Conflict On Corporate Non-Efficient Investment

From a macro perspective,investment is one of the three carriages to promote national economy,which constitutes the basis of macroeconomic growth.From the micro point of view,investment is the key factor to improve the competitive advantage of enterprises.Investment decisions are the core decisions of the three financial decisions.Reasonable investment decisions can bring positive cash flow to the enterprises and increase the firm value.The listed companies in China are faced with the problem of low investment efficiency for a very long time,and the widespread agency problem in listed companies is one of the important reasons for non-efficient investment(including over-investment and under-investment).The domestic and foreign researches on the agency problems can be mainly divided into two types:the conflicts of interest between shareholders and managers when the ownership structure is relatively dispersed and the conflicts of interest between large shareholders and small shareholders when the ownership structure is comparatively concentrated.As for the Chinese listed companies in the transitional economy,on the one hand,the relative concentrated ownership structure brings about serious control problems of major shareholders,which leads to agency costs of major shareholders.On the other hand,with the information advantage,the management can expand the residual control rights,and make opportunistic behaviors that damage the firm value but increase their own interests,resulting in the agency costs of the management.To study the phenomenon of non-efficient investment of listed companies in our country,this paper systematically analyzes the enterprise investment behavior under the two kinds of agency conflicts.Considering the equity structure of listed companies in our country is relatively centralized,large shareholders can exercise significant control over the investment decisions of listed companies.At the same time,the influence of managerial behavior on enterprise investment cannot be ignored.Large shareholder control and management agent behavior produce two kinds of agency costs respectively,and two types of agency costs exist at the same time in the listed companies in our country.This paper uses management expense rate and total asset turnover to measure agency costs due to managers harming the interests of the shareholders,and uses the ratio of other receivables to total assets to measure agency costs due to large shareholders damaging the interests of minority shareholders.The 2013-2017 data of A-share listed companies in our country is used to research the impact of agency costs on inefficient investment.Considering the investment behaviors in the state-owned and non-state-owned listed companies can be different,this paper uses of descriptive statistics,correlation analysis and multiple regression analysis and so on to investigate the influence of agent costs on excessive investment and inadequate investment in both state-owned and non-stated-owned companies.There is a solid evidence that the following three findings are robust after a series of empirical researches.Firstly,as far as the first category of agency costs is concerned,the management's direct agency costs has a significant positive correlation with the under-investment,but an indistinctive correlation with the over-investment,which means that with the increase of the management expense ratio,the level of enterprise's under-investment keeps rising.The management's indirect agency costs has a significant negative correlation with the over-investment,but an indistinctive correlation with the under-investment,which means that with the decrease of the total asset turnover,the over-investment level of the enterprise increases correspondingly.Considering the difference of property right,the first kind of agency costs has a more significant impact on the level of non-efficient investment in non-state-owned listed companies.Secondly,as far as the second type of agency costs is concerned,the agency costs of large shareholder control has a significant positive correlation with under-investment,but an indistinctive correlation with over-investment,which means that with the increase of the proportion of funds occupied by major shareholders,the level of under-investment of enterprises keeps rising.Considering the difference of property right,the second kind of agency costs has a more significant impact on the level of non-efficient investment in non-state-owned listed companies.Finally,although both over-investment and under-investment coexist,the overall performance of listed companies in China is under-investment,in which non-state-owned listed companies are more prominent than state-owned listed companies.It is important to solve the problems of management agency and major shareholders' control.Based on the three above conclusions this paper has drawn,specific suggestions have been made in order to reduce the first type of agency costs and the second type of agency costs.