Resignation Of Official Independent Directors And Investment Efficiency Of Enterprises

With the deepening of the comprehensive reform strategy,China is making extra efforts to advance the supply side reform.Means that China's economic development and trade investment has gradually transformed from quantitative growth to quality growth.As an important subject of economic and trade investment,enterprises also require them to move from a quantitative investment model to a steady and efficient investment approach.However,the influence of external governance factors such as entrusted agents and the external environment such as government intervention has caused many enterprises to face inefficient investment dilemmas,which in turn affects the operational efficiency and value of enterprises.Therefore,how to improve the investment efficiency of enterprises by improving the internal governance structure and optimizing the investment environment has always been an important topic concerned by the theoretical and practical circles.As a key component of corporate governance construction,the independent director system should play the dual role of supervision and resource provision to ease the contradiction between principal and agent,improve the overall governance level of the enterprise,and protect the vital interests of small and medium shareholders.Since 2001,China has officially introduced the independent director system.After 18 years of testing,its implementation effect seems to be questionable.The theoretical and practical circles are controversial about whether the independent directors can really exert their supervision and provide effective resources.As a result,many people think that the effective independent director system in western developed countries has suffered from different results,and become "vase independent directors".At the same time,China's independent director market has spawned a spectacular phenomenon of “political and business revolving door” – a large number of government officials have retired to the company as independent directors.This part of the official independent directors has brought financing convenience,industry admittance,tax preference,government subsidies and other resources to the company by virtue of its "proprietary political capital",but to a certain extent,it is a tool for the listed company to transfer benefits to the relevant parties.To this end,on October 19,2013,the Central Organization Department promulgated the Opinions on Further Regulating the Issues of Party and Government Leading Cadres in Part-time Employment(hereinafter referred to as “No.18 Document”),The current and not yet retired leading party and government cadres are prohibited from taking part-time jobs in enterprises.As a result,the company has set off a wave of "resignation craze" for official independent directors.This has brought about a "big change" for the company's independent director structure,and also provided a quasi-natural experiment platform for independent directors of research officials.The existing research on the economic consequences of the forced resignation of independent directors of the officials,the scholars mainly observed through the market reaction,the conclusions are not unified,and the impact on corporate investment behavior has not attracted enough attention.Based on this,this article manually collected all resignation announcements from October 19,2013 to December 31,2014 with the quasi-experimental platform formed by “No.18 Document”,and combined with the resumes of independent directors,and screened out the resignation data of all the official independent directors due to the “No.18 Document”.And using the financial data of A-share listed companies in Shanghai and Shenzhen stocks from 2010 to 2017 to construct the DID model to test the impact of the resignation of official independent directors on the investment efficiency of enterprises.Moreover,with the help of moderating variables such as administrative level,property right nature,dividend payment rate level and marketization degree,further analysis of the differences in the impact of the resignation of independent directors and the efficiency of corporate investment.The study found that after the forced resignation of the independent directors,the overall investment efficiency of the company increased,which is mainly reflected in the reduction of excessive investment and no significant change of insufficient investment.The empirical evidence in this paper indicates that the issuance of the “No.18 Document” of the Central Organization Department has prompted the independent directors to passively resign,improve the corporate governance structure,reduce the access of enterprises to investment and financing channels,and increase the future business operations.Uncertainty,forcing companies to hold more cash to deal with business risks,investment is more cautious;At the same time,the resignation of official independent directors can help to alleviate the overconfidence of the management.get rid of the government's “grabbing hand” and cut off the realization of “option corruption”,which has made the investment decision of enterprises more standardized and further optimized the investment environment of the enterprise.It demonstrates the validity of "No.18 Document",expands the research scope of political connection,provides evidence support for regulating the independent director market,and enriches the research on the mechanism of macroeconomic policy's influence on micro-enterprise behavior.In addition,this paper examines the nature of property rights,the level of dividend payment rate,and the degree of marketization.The results provide information and reference for the relevant departments to promote the reform of state-owned enterprises,and provide enterprises with the means to improve "internal governance" and optimize "external competition".