Have Private Equity Funds Intensified The Short-sighted Behavior Of Companies?

In China,private equity funds have reached a scale of over 10 trillion after more than a decade of development,and have become a core force supporting the development of innovation.However,due to the specific market environment and development stage,Chinese private equity funds are pursuing "short,flat and fast" benefits in the fund investment process.The short-term investment target will be transmitted and affected through the investment screening and post-investment management activities.Especially during the fund withdrawal phase,whether private equity will aggravate the short-sighted behavior of enterprises,which is the focus of this paper.Based on the core theory of short-sighted theory,this paper builds a regression model based on the previous research results.Taking the non-financial companies listed in A-shares from 2014 to 2016 as a sample,this paper focuses on the impact of long-term investment and continuing effect in the private equity fund withdrawal phase,with the purpose to demonstrate whether private equity funds have increased the short-sighted behavior of enterprises.Through the combination of theoretical and empirical analysis methods,this paper draws the following conclusions:Private equity investment leads to a 2.2%reduction in the listed companies long-term investment level at the significance level of 1%.The joint investment of private equity funds and high reputation.The joint investment of private equity funds and high-profile private equity funds have reduced the long-term investment level of the company at a level of 1%significance,and will still significantly reduce the long-term investment of enterprises within two years after IPO,thus exacerbating the short-sighted behavior of invested companies.For every one percentage point increase in the shareholding ratio of private equity funds,the long-term investment level of the company’s listing decreased by 0.2 percentage points;the decision-making of state-owned enterprises was more dominated by the goverrnment,thus it alleviates the negative impact of private cquity’ s the short-sighted tendency on enterprises’long-term investment.This article starts from the author’ s work experience and industry observation,from the perspective of the impact of the private equity fund on the enterprise during the withdrawal stage,which is a new perspective with few previous research,and demonstrates whether private equity investment has aggravated the short-sighted behavior of the enterprise.This paper complements the previous research and provides experience and reference for the investment and supervision of the private equity industry.