Research Of Management Power And Over-Investment

With the rapid development of social economy,as an important participant in the market economy,how to survive in the competition and maintain stable development has become an important issue that enterprises need to solve urgently.The correct investment direction and investment plan are conducive to solving this difficulty,enabling enterprises to go on the right path and obtain more development possibilities and opportunities.Therefore,the improvement of investment efficiency has become an eternal topic for many researchers from ancient to modern times.Some studies have pointed out that the most important factor affecting the personal interests of executives and shareholders is agency conflict.Senior executives may continue to invest in foreign countries for reasons such as the growth of personal interests or personal overconfidence,resulting in over-investment.In listed companies,the company’s short-term policies and even long-term strategies are determined by senior executives.The behavior of senior executives directly affects the investment decisions of enterprises,and their operating efficiency is crucial to the high-quality development of the enterprise economy.Therefore,it is necessary and a long way to go to study the relationship between management power and investment efficiency.In order to solve the current problems faced by enterprises,we can improve the internal control mechanism internally and rely on the regulatory system externally.As a widely recognized external governance mechanism,analysts’ attention has played a role in the supervision and management of market participants,and has become a bridge between the differences of information between investors and invested companies,easing the degree of information asymmetry in the capital market.The paper is based on four theories,namely property rights theory,information asymmetry theory,management power theory and principal-agent theory.From the perspective of analysts’attention,the paper takes the public data of A-share listed companies in 2012-2020 as the research sample,and builds an empirical model for multivariate regression.First of all,the relationship between management power and over-investment was tested by regression analysis using the comprehensive management power index.Second,the adjustment of analysts’ attention was studied,and the impact of analysts’ attention on the two was tested by regression analysis.Finally,according to the regression results,the impact relationship between the two groups of sample companies and state-owned enterprises was tested respectively.Through the research,we find that:(1)The power of management is positively correlated with over-investment.It shows that the greater the power of the management,the easier it is to lead to over-investment.(2)Analysts focus on the negative regulatory role in the influence of management power on over-investment.It shows that the more analysts pay attention,the less negative impact of management power on overinvestment.(3)Compared with non-state-owned enterprises,the influence of management power of state-owned enterprises on over-investment is more significant.Through sample grouping,it shows that management power still has influence on over-investment behavior and has significant differences.The paper enriches the theoretical research results of management power and investment efficiency,and has positive value in alleviating agency conflicts and restraining information asymmetry;It empirically tests the impact of analysts’ attention on the management power and over-investment effect of listed companies in China,and improves the importance of enterprises’ attention to analysts’ attention;This paper explores the institutional factors behind the relationship between management power and over-investment,extends the research on management power and over-investment to the external macro environment of enterprises,and provides a certain theoretical basis and new ideas for Chinese enterprises to improve corporate governance structure,strengthen external control construction,improve investment efficiency,and promote sustainable development.There are 1 figure,10 tables and 50 references in the paper.