| Investment, financing and dividend distribution are the three themes in the financial management of the enterprises. Among them, investment efficiency will have significant impact on the enterprise’s development and overall value. Thus, from the perspective of the relationship between investment expenditure and cash flow, studies on the enterprise’s non-efficient investment have been the focus of scholars in the theoretical and empirical domain. A large number of empirical studies have shown that investment expenditure is sensitive to the change of cash flow, and this sensitivity will be affected by the enterprise’s control structure, which will be ultimately determined by the ownership structure. Therefore, under the background of China’s capital market, it’s necessary to discuss special ownership structure’s effect on the investment cash flow sensitivity.This paper selects the listed companies in Shanghai and Shenzhen from the year2004-2012as research samples, combined with ownership nature, and tests the effect of different ownership structures on the investment cash flow sensitivity from the point of management and large shareholder’s share proportion, which uses Euler equation investment model and dynamic panel’s system generalized moment estimation method (GMM). The results show that investment cash flow sensitivity does exist in our country’s companies and this sensitivity conforms to the Free Cash Flow Hypothesis. The state-owned enterprises’investment cash flow sensitivity is much higher than non-state-owned enterprises’. Considering the effect of ownership structure on investment cash flow sensitivity, the state-owned enterprises’interests converge of management and supervision of large shareholder are relatively weaker, however entrenchment effect and occupation effect are more significant, which is compared with the non-state-owned enterprises. Besides, interests converge of large shareholder’s share proportion exists in the state-owned enterprises, which makes investment cash flow sensitivity decline after increasing under the occupation effect of large shareholder’s share proportion. Based on the above research conclusion, this paper proposes the following suggestions:Establish and improve the internal motivation and appointment mechanism of management, promote the reform of state-owned assets management system, bring in non-state capital and give full play to the advantages of mixed ownership in order to improve ownership structure governance effect, enhance enterprise’s investment efficiency and overall value. |
