Empirical Research On The Influence Of Structure Of Stockholder And Quality Of Financial Reports On Over-investment

The investment policy or decision, as the core focus of Modern Firm Theories, plays a significant role in the value-added progress of firms as well as in the economic development of countries—from the perspective of the firm, the investment is the vital fundament of the further cash flow increasing and the major motivation of the firm developing. Additionally, in terms of the country, the efficiency of investment will not only has a direct effect on the social resources allocation, but also will influence the smooth performance of the macro-economy.The inefficient investment is a rather current and common phenomenon worldwide as well as in China. It consists of the behaviors of excessive or insufficient investment, the former of which is comparatively more severe than the latter one. The excessive investment phenomenon has recently drawn increasing attention in academic and economic circle, since it is liable to ultimately result in the investors'grand profit losses caused by the waste of resources and growth of firm financial risk and burden due to a great deal expansion of capital in the field of overcapacity. However, articles focusing on the excessive investment from the angel of the quality of financial reports, and the interaction between the structure of stockholders and the quality of financial reports, which are particularly practical and benefit for the standard of investment behaviors and improvement of investment efficiency, are still hard to be found up to now.This thesis carries out an analysis on the factors which will impact the inefficient investment behaviors of enlisted firms in China from both theoretical and practical aspects. Firstly, through the analysis, which has the degree of surplus management as substitute variable and modified DD module as reference, the relationship between the quality of financial reports and enterprises'excessive investment is explored in order to provide experience evidence about the influence stemming from financial reports on enlisted firms.Secondly, by relying on the conflict angle of stockholder—manager, substantial stockholder—minority shareholder, as well as combining the category of stockholder structure with its typical embodiment in Chinese enlisted firms, this thesis, then, demonstrate and analyze, both theoretically and practically, the factors influencing firms' excessive investment behaviors in light of the nature of stockholder and the level of ownership concentration. Finally, this thesis also researches into the co-influences brought about by the structure of stockholder and the quality of financial reports on the investment efficiency of enlisted firms. Here are the findings of this thesis:①The quality of financial repots has an effect on the enterprises'investment efficiency. The quality of financial repots has a negative correlativity with the enterprises'excessive investment, which means that there is a positive correlativity between the degree of surplus management and the excessive investment.②The structure of stockholder influences the enterprises'investment efficiency. When the country acts as the stockholder, the involvement of states shares will reduce the level of excessive investment; when the stock ownership is relatively concentrated, the existence of substantial stockholder, who is comparatively in charge, will also weaken the chances of excessive investment.③Under the co-influences of the structure of stockholder and the quality of financial reports, the presence of state shares and ownership concentration will decline the negative correlativity between the quality of financial reports and the excessive investment, as well as suppress the excessive investment behaviors of enlisted firms.According to the researches and findings mentioned above, this thesis comes to a conclusion: considering the relatively inefficient capital market in China and the lack of sound legislation on investors'protection, the enhance of quality of earnings and the maintain of ownership concentration are the means to raise the level of investment decision making, improve the enterprises'investment efficiency, and reduce excessive investment. In the end of this thesis, based on those findings, some suggestions are also provided on how to specialize the excessive investment behaviors and increase the investment efficiency of the enlisted firms in China.