Empirical Study On Ownership Structure And The Sensitivity Of Capital Expenditures

Corporate capital expenditure is a national goal of economic growth and an important mean of macroeconomic control to maintain its corporate existence and the necessary way of development. Pharmaceutical industry as a foundational industry , related to people's livelihood. New healthcare reform order have been opened a prelude to reform of health system in 2009; meanwhile it also released a broad space for the development of pharmaceutical industry. As of August 2010, fixed asset investment of pharmaceuticals manufacturing amounted to 111,434 billion, the growth rate of the pharmaceutical industry at an increase of 29.3% in recent years. Fundamentally speaking, the ownership structure is the cornerstone and the core of corporate governance structure; determines the distribution of benefits and the risk commitment of risk, generates the decision-making and management structure of the companies. Therefore, the study on the relationship between ownership structure and capital expenditure in pharmaceutical industry has some practical significance.The essay firstly reviews the research achievements of ownership structure and capital expenditure at home and abroad, fully explains agency theory and pecking theory under the assumption of rational economic man, and overconfidence theory under the assumption of rational- limited man. On the basis, the essay further elaborate the concept and measurement of ownership structure and capital expenditure, which lays the foundation of the empirical research following. Then, the essay analyses the process of its development, meanwhile puts emphasis on the discussion of the present situation of ownership structure and capital expenditures in pharmaceutical industries.The essay adopts empirical analysis, constructing the basic model of ownership structure and capital expenditure. Through the regression on 220 panel data from 2007 to 2009, the empirical results manifest that: (1) The capital expenditures and internal cash flow of pharmaceutical listed company is significantly positive; (2) The proportion of state-owned shares on capital expenditures-cash flow is negative. The proportion of corporate shares on capital expenditures-cash flow is negative. The proportion of stock A shares on capital expenditures-cash flow is negative; The proportion of institutional shareholding on capital expenditures-cash flow is negative;The proportion of managerial shareholding and capital expenditures-cash flow is positive; (3) For intensive degree of share ownership, the proportion of the largest shareholder of capital expenditures-cash flow is rather negative; (4) For different control people type, the investment mode of state-owned enterprise is normal, the non-state-owned enterprise has overinvestment tendency.Finally, based on conclusion of ownership structure on capital expenditures-cash flow, we give some suggestions: to introduce institutional investors, which play an active role in corporate governance; to improve the disclosure system of listed companies; to improve the corporate executives'shareholding mechanism.