Research On Corporate Governance Structure,Financial Market Development And Investment Efficiency

Investment decision-making has always been one of the financial issues that companies are most concerned about.The more effective the investment is,the better the company's economic growth and the competitiveness of its industry will be.On the contrary,inefficient investment will inhibit the healthy development of enterprises and weaken their market competitiveness.Therefore,it is of great significance for enterprises to study how to achieve optimal enterprise efficiency.Corporate governance is an enterprise's internal management.Good internal governance mechanisms can promote effective investment decision-making.The existing literature basically explains the impact of governance on investment efficiency from the following aspects: the structural characteristics of equity,the incentive policies of executives,the characteristics of the board of directors.But in fact,the investment efficiency of a company is not only affected by the internal environment,it is also constrained by the external environment,especially by the level of regional financial market development.The internal governance factors of an enterprise belong to the micro-environment,which affects the investment efficiency of the enterprise,and the level of financial development as an external macro factor affects the relationship between the two.This article first divides the investment efficiency into two groups: overinvestment and underinvestment.It analyzes the impact of various internal governance mechanisms of the company on the investment efficiency of the company.The results show that the higher the proportion of the company's largest shareholder,the more it will curb overinvestment and exacerbate underinvestment;corporate equity balance is significantly positively related to over-investment and significantly negatively related to under-investment.Most existing literature believes that the stronger the ability of corporate shareholders to check and balance each other,especially other shareholders' The higher the balance of the largest shareholder,the more likely it is to avoid the possibility of "tunnel behavior" by the major shareholder.In view of the principle of interest,the remaining major shareholders will increase their enthusiasm for the supervision of the largest shareholder.The characteristics of corporate equity of listed companies are more likely to form an "alliance model" among shareholders of the listed company.The controlling shareholder and the remaining large shareholders have a stronger incentive to join forces to seize the company's interests,trying to obtain more profits through continuous investment,and eventually intensify.This reduces the over-investment behavior of the company,while on the other hand it also slows down the under-investment tendency of the company.Employees of state-owned enterprises have less correlation with company performance.They will not invest blindly to improve performance.State-controlled companies are subject to stricter government supervision than other types of companies.The nature of property rights can curb the excessive investment motivation of corporate executives.In addition,due to the close relationship between the affiliated enterprises and the government,the executives of state-owned enterprises have a strong political color.Since the national anti-corruption storm in 2012,the political motivation of state-owned enterprise executives' "inaction" will lead to underinvestment.In addition to the characteristics of equity,this article believes that increasing the size of the board of directors of enterprises will curb their over-investment behavior and improve their under-investment.For corporate governance,the external market environment of an enterprise will affect the relationship between internal governance and investment efficiency.The above research results confirm the impact of corporate equity governance and the size of the board of directors on the overinvestment and underinvestment of the enterprise.The greater the degree of connection between the major shareholders in equity governance,the higher the degree of checks and balances,the more likely it is that the alliance will expand investment and worsen the company Overinvestment tendencies,on the other hand,can improve the appearance of underinvestment;The higher the shareholding of the largest shareholder,the more the over-investment situation will be exacerbated;the state-owned nature of the enterprise will affect the investment efficiency of the enterprise to varying degrees.At the same time,the maturity of the financial market in the region where the company is located will regulate the relationship between internal governance factors and investment efficiency to varying degrees.In the end,the article also gives corresponding suggestions on how internal governance can improve investment efficiency and how to strengthen the development of financial markets.The innovation of this article is to incorporate the macro-factor financial market development level into the study of the relationship between micro-factors of internal governance and investment efficiency,and explore its specific regulatory effect on underinvestment and overinvestment.This article enriches the research on internal governance and investment efficiency,and provides a theoretical reference for how companies can obtain the best investment efficiency in the current market environment.