Research On The Restriction Effects Of CEO Reputation On Over-Investment Behavior Of China’s Listed Companies

Given that China’s listed companies have different ownerships, a model concerning CEO reputation and over-investment behavior is established according to the perspective of agency theory. It shows that reputation has restriction effects on over-investment for non-government owned companies, and none for government owned ones. Furthermore, based on the data of524listed companies from2007to2010and the method of Richardson(2006), the regression results confirm the model’s prediction. This study contributes a new measure of over-investment rectifications, and indicates the necessary things that we should do to improve the economic efficiency.