Vertically Appointed Senior Management And Investment Efficiency In Private Enterprises

With the emergence of the separation of the two powers,the investment decision of the enterprise is often the result of the game of controlling shareholders and executives.The resulting agency cost greatly reduces the investment efficiency of the enterprise.The controlling shareholder strengthens the control of the company through means of crossshareholding,pyramid structure,different shares and senior shareholders,to maximize the self-interest.Vertically concurrently is an important way to strengthen the control of the listed company in China,which has an important impact on the investment decisions of enterprises.In order to protect the rights and interests of small and medium-sized shareholders,the CSRC and other institutions have successively issued relevant policies to restrict and supervise the behaviors of listed company executives.However,at present,China is still in a period of economic transformation,the investor protection legal system is relatively weak,and the relevant punishment mechanism is not perfect.Compared with developed countries,the negative effects brought by concurrent executives are still relatively significant.Combining the characteristics of the company's shareholding structure and the status of agency problems,it is of good practical and theoretical significance to analyze the motives and specific influences of vertical concurrent executives,and it can provide new empirical evidence for the subsequent development of corporate regulatory measures and government policy formulation.What's more,it can help to provide advice and guidance for private enterprises to improve the company's shareholding structure and governance system.This paper takes the A-share private listed companies in Shanghai and Shenzhen stock markets from 2012 to 2017 as a research sample,studies the impact of vertical concurrent executives on the investment efficiency of private enterprises,and tests the impact path.The specific conclusions of this paper are as follows: First,vertically concurrently will reduce the investment efficiency of private enterprises.Compared with its supervisory role on listed companies,vertical concurrent executives are more likely to be the major shareholder's tool to encroach on minority shareholders' equity.Second,the impact of vertical concurrent executives on the investment efficiency of private enterprises is mainly reflected in the problem of insufficient investment of enterprises.Large shareholders use “tunnel mining” to transfer the assets and profits of the company,which leads to the company missing investment opportunities.Third,through the path test,it is found that the specific part of the mediation effect of the major shareholders “short-cut”,that is,the vertical concurrently the senior management will reduce the investment efficiency of the enterprise through the “shorting” of the major shareholder.Fourth,vertical and concurrent executives have a more significant negative effect on corporate investment efficiency when they are also responsible for important positions such as the chairman or CEO.Fifth,horizontal concurrently serving as an executive can improve the investment efficiency of private enterprises,but its impact is weaker than that of vertical concurrent executives.The main research innovations in this paper are as follows: First,this paper explores the impact of vertical concurrent executives on the investment efficiency of private enterprises,and further studies the impact of vertical concurrent executives on corporate investment and over-investment,enriching the concurrent management of executives.Second,this paper comprehensively analyzes the influence of senior executives on the investment efficiency of private enterprises and the specific role of the combination of the status quo of senior executives,relevant policy systems and the status of agency problems of private enterprises.Third,this paper compares the effects of vertical and horizontal concurrent executives and enriches relevant research.