Study On The Control Characteristics Of Ownership And Investment In Chinese Listed Firms

Investment is one of the most important financial decisions, and it involves the collection and allocation of capital. As the most driving force and the base of the future cash flow, investment influences the risk, earning and assessment of development direction. Investment is the first step of corporate decision. Because of the factors'complexity and multiplicity which influences the decision-making process, firms make investment decisions tend to deviate from the optimal investment behavior, and be overinvestment and underinvestment. And because of the difference among shareholders, the problem solving and ownership, there is a clear difference in both the company's investment behavior and the corporate performance. Existing research suggests that the relationship between the ownership and corporate investment behavior is affected by different control methods. Therefore, it is necessary to study the relationship between the control characteristics of ownership and the company's investment behavior.Based on the property rights reform of state-owned enterprises of China's listed companies and the complexity ownership, the thesis analyze the impact of the control characteristics of ownership on the under-investment and over-investment behavior. The thesis use the China's listed companies empirical data in 2005-2008 as a sample to make empirical test. when distinguish the difference of the control characteristics of ownership ,if the actual controller is the central state-owned enterprises, the thesis call it the central government controller; if the actual controller is the government and State-owned Assets Management Committee, the thesis call it the local government direct controlled companies ; if the actual controller is local government state-owned enterprises , the thesis call it the indirect government controlled companies; if the controller can be defined as natural persons, private enterprises, then recognize it as private controlled companies. This is an innovative point of this article. In addition, this article will make the control characteristics of ownership as the main explanatory variables regression, more intuitive and profoundly tested different types of ownership on investment behavior. This is the second innovation of this article.The thesis draw the following conclusions: First, the central government controlled companies and the local government direct controlled companies have the inefficiency investment less than the local government indirectly controlled by listed companies. Second, there is not a positive correlation or a negative correlation between over-and under-investment and both the central government controlled companies and the local government direct controlled companies. Third, there is a positive correlation between overinvestment and the local government indirect controlled companies, and there is a negative correlation between underinvestment and the local government indirect controlled companies. Based on the above study, the thesis gives the advice how to promote the efficiency of investment.