The Impacts Of Divergence Between Control Rights And Cash-flow Rights On Chinese Listed Companies' Investment Behavior

As a major cause of company's development and an important foundation for growth of future cash flow, companies'investment will directly affect the company's financial decision and dividends. However, inefficient investment behaviors of enterprises will lead to harmful economic fluctuations and waste of resources.The traditional corporate governance theory is based on dispersed ownership and relationship and the principal-agent relationship between owners and managers-entrusted. However the dispersed ownership is not universal phenomenon. Many proofs indicate that the share structure of the listed companies is very centralized, and exists ultimate controlling shareholders in the listed companies in many new market economy countries. Ultimate controlling shareholders can hold control rights exceed their cash flow rights in concentrated ownership structure. The deviation of the two rights would drive controlling shareholders to obtain numerous private benefits through violating minority shareholders'benefits if minority shareholders are poor protected. Under this background, research on the effect of the separation coefficient of cash flow rights and control rights on investment efficiency has important practical meanings. In order to analyze the influence of ultimate control, shareholders'cash flow rights and control rights on the performance of investment efficiency. Firstly, theoretically analyze the measurement and form of the separation of the cash flow rights and control rights, the influence factors of investment efficiency and the action mechanism of the deviate of cash flow rights and control rights on investment efficiency; Secondly, based on a set of China listed companies of controlling rights exchanges from 2005 to 2008, we measure investment inefficiency and analyze it. And then, through control relations framework of the listed companies'yearly report forms to trace the control chain to find the ultimate controlling shareholder, and to measure the cash flow rights, control rights and deviate, of the ultimate controlling shareholder. Thirdly, take some more influence factors of the cash flow rights, control right, deviate and so on; analyze the effects on the investment efficiency.Generally, the empirical studies indicate the deviate of listed companies and over-investment in a significant degree of positive correlation, but on the under-investment is not significant. In addition, we also deep study the different nature of China's listed companies'ownership control rights and cash flow in the separation of powers cases, the company's deviate and property rights structure on investment efficiency effect, the study found only in the private control of public company, the deviate has a significant adverse impact on investment efficiency; at in local state-owned listed company, the deviate of two rights only has significant effect on over-investment and on under-investment is not significant. In the central-listed companies, the deviate of these two rights has no significant both on over-investment and under-investment, and has some inhibition effects on investment inefficiency, indicating the deviate of listed companies may also be a certain protection mechanisms.