Fair Value, Executive Control And Corporate Investment Efficiency

The application of fair value measurement attributes and its economic consequences have always been the hotspots of academic and practical research.The discussion around this issue has never been interrupted.As the role of financial information in the capital market has become increasingly prominent,the value relevance of fair value has gradually been recognized.At the same time,the accounting standards setting body regulates and guides the specific application of the fair value measurement attribute,so that the transparency of the quality of relevant financial reports obtained by using the fair value measurement attribute is further improved,and the fair value of related assets and liabilities is increased in finance.The credibility of information users in their minds,and continue to use it as a reference for investment decisions.In recent years,the issue of investment efficiency has also received much attention.The theoretical and practical circles generally believe that the principal-agent problem arising from the reform of the corporate system is the main reason why the level of investment of enterprises is not ideal.The mechanism of action is information asymmetry..Since the financial information obtained by fair value measurement is more value-related,the transparency of financial information is also improved,which helps to alleviate the information asymmetry between the principal and the agent,and the investment efficiency problem is the core of capital market concern.The question,then how the use of fair value measurement attributes will affect the efficiency of corporate investment deserves further study.In addition,the size of power owned by management as an important factor in corporate governance has a significant impact on the disclosure of corporate financial information and investment decisions,so explore the efficiency of fair value measurement under different management powers.The effect is quite practical.This paper takes the A-share listed companies in Shanghai and Shenzhen stocks from 2009 to 2016 as a sample,and uses the Richardson model to measure the investment efficiency of enterprises,explores the effect of fair value measurement on them,and uses executive power as a regulatory variable to empirically test its The impact of the relationship between the two.The research results show that:(1)Fair value can improve the transparency of financial information and improve the information environment,which is conducive to improving the efficiency of enterprise investment.Further distinguishing between over-investment and under-investment found that fair value measurement has a significant inhibitory effect on over-investment.The possible reason is that the phenomenon of over-investment in China is more common and has a greater impact,and the fair value measurement effect is more obvious.(2)From the theoretical analysis and empirical results of executive power and corporate investment efficiency,executives with greater power are more likely to lead to inefficient investment than executives with lower power,and executive power and over-investment are significant.Positive correlation.(3)The executive power over-the-week weakens the role of fair value measurement in improving the efficiency of corporate investment.The use of fair value measurement attributes can improve the efficiency of enterprise investment.In the sample of high executive power,this promotion effect is obviously weakened.Large executive powers easily lead to fair value measurement as misleading market in investment decision-making.And investor tools to reduce the efficiency of corporate investment.