Impact Of Equity Structure On Investment Efficiency

The level of investment of an enterprise determines the future development of the enterprise.The information asymmetry which is caused by the separation of the two powers in a modern enterprise lets the enterprise to deviate from the optimal investment level and causing overinvestment and underinvestment.In addition,the game of interest among small and medium shareholders will also cause the problem of inefficient investment.Inefficient investment will not only affect the value of the enterprise,but also lead to the waste of social resources.In this circumstance,improving the efficiency of investment is a problem,which needs companies to solve urgently.Ownership structure is an organic part of corporate governance structure.Different ownership structure of enterprises means that,the rights and interests of shareholders are distributed differently.Plus,the different nature of controlling shareholders and shareholding ratio will make the internal governance mechanism,which isperforming the different investment efficiency about the company.Ownership structurecan be seen that equity concentration is one of the influencing factors of investment efficiency.Scholars who are at home and abroad have made many achievements in the study of the relationship between the area of equity concentration and investment efficiency,but most studies have not compare them by industry ever.Due to the differences in the degree of competition about the industry,the corresponding investment efficiency is also affected by the ownership structure.Therefore,that is the great practical significance to study the relationship between ownership structure and investment efficiency in the view of industry competition.This paper start with discussing the he relationship between equity structure and investment efficiency of listed companies,measures equity structure with two dimensions: equity concentration degree and equity balance degree,and in-depth study on the basis of principal-agent and information asymmetry theory.First,research the relationship between equity concentration,equity balance and investment efficiency of listed companies.Secondly,according to the 17 categories of industries(excluding the financial sector)classified by the guidelines on the classification of listed industries,the Herfindahl index of the industry is divided into monopoly industries and competition industries.Researching whether the degree of competition in the industry will affect the relationship between ownership concentration andinvestment efficiency impact.Finally,the degree of equity checks and balances in monopolistic and competitive industries is compared to the degree of efficiency investment.Collect the data of listed companies in 2012-2018,the proportion of the previous five major shareholders holding shares and measure the ownership concentration,measure the equity balance degree with the Z index,measure the investment efficiency Richardson the residual of the model,and use the panel data to build a multivariate model for regression analysis.The results show that:?The inefficient investment behavior of listed companies in China is mainly manifested in insufficient investment,but the degree of excessive investment is more serious.?Equity concentration of listed companies is related to investment efficiency as parabolic curve and equity balance is positively related to investment efficiency.?The influence of ownership concentration on investment efficiency of listed companies under different competitive forms is not the same.Monopoly industry equity concentration is related to investment efficiencyas parabolic curve,while competition industry equity concentration is positively related to investment efficiency.(4)Compared with monopolistic industries,the effect of equity checks and balances in competitive industries on improving investment efficiency is more obviously.It is obviously that for industries with different levels of competition,different ownership structures need to be arranged.According to the current market situation in China,combining with the research conclusions,this article puts forward corresponding policy recommendations: First,establishing an appropriate shareholding concentration.Not only the industry 's competitive industry,but also shareholders 'mutual checks and balances should be considered.Besides,improve the manager 's market and strengthen the supervision and control of investment decisions.