Research On The Influence Of Managerial Ability On The Over-investment Of Enterprises

Effective investment is important for the company to maintain steady growth.However,in recent years,the problem of non-efficiency investment of listed companies in China is serious,and an important reason for this phenomenon is the over-investment behavior of enterprises.Therefore,it is urgent to study the factors that affect excessive investment.Management is the actual controller and executor of the enterprise,which determines the size,direction and choice of the company's investment.The level of its ability will undoubtedly affect the investment efficiency of the enterprise.Therefore,this article from the new perspective of managerial ability,Research as the core of enterprise management,how their ability will affect the over-investment of enterprises,and further explore the influence mechanism of managerial ability on over-investment,and provide theoretical support for enterprises to create value more efficiently.First of all,this thesis uses the data of A-share listed companies in China's Shanghai and Shenzhen stock markets from 2008 to 2017,and uses the DEA-TOBIT two-stage model proposed by Dermerjian et al.(2012)and the expected investment model proposed by Richardson(2006)to measure managerial ability and over-investment levels,then using hybrid OLS regression to examine the impact of managerial ability on over-investment,and found that high-capacity managers can significantly suppress over-investment behavior.In addition,the thesis tests the robustness test by changing the measure of over-investment,the regression method and the proxy variable of investment opportunity.The test results further confirm the hypothesis of this thesis.Secondly,this thesis analyzes the adjustment effect of the two aspects from the size of the board of directors,whether the manager has options or equity incentives,the proportion of institutional investors,and the transparency of company information.The results show that:(1)When the size of the board is larger,it can exert positive supervision effect on the manager.The resources owned by the board also help the manager to make reasonable investment decisions;(2)the manager has options or equity incentives.When it is possible to prevent managers from harming the long-term development of the company in pursuit of their own interests,in order to achieve better performance growth in the future,managers generally do not choose investments with a net present value less than 0,thereby inhibiting the occurrence of over-investment;(3)When the institutional investor's shareholding ratio is higher,it has more motivation and ability to supervise the management of the holding company and participate more effectively in the governance of listed companies,which greatly inhibits the over-investment behavior.(4)When the transparency of company information is higher,it is beneficial for investors and business owners to more effectively supervise the self-interest of managers,improve the efficiency of corporate governance,and managers will choose NPV more positively.Investment projects have a certain inhibitory effect on over-investment.Finally,the investment opportunity Tobin Q is used as an intermediary variable to verify that the influence of managerial ability on over-investment is exerted by increasing the investment opportunities of enterprises.The results show that the managerial ability has an intermediary transmission mechanism for the enterprise's over-investment behavior.The high-capacity manager can obtain more social capital and valuable information for the enterprise,increase the investment opportunities of the enterprise,and thus improve the company's capital investment decision,suppress over-investment behavior.This thesis refines relevant research,separates over-investment from investment inefficiency and focuses on research,specifically discusses the impact of managerial ability on over-investment,and reveals that managerial ability is an important factor affecting corporate investment.To a certain extent,Enriching existing research results.It has important practical significance for enterprises to create value and sustainable development more efficiently.In practice,it can also provide reference for enterprises to reduce excessive investment and improve economic efficiency,and provide certain theoretical references and relevant suggestions for Chinese enterprises' investment decision theory and related policy makers.