The Study Of Property Ownership、 Inefficient Investment And Firm Value

Financing activities, investment activities and dividend distributions are the three core contents of financial management for listed companies. Among them, the investment activities as the foundation of the enterprise future cash flow growth and the main motivations of enterprise growth, directly affect the company’s financing and dividend distribution decisions, so are the enterprise’s most important financial decisions. In addition, by evaluating the efficiency of investment decision-making, financial management can clearly understand the enterprise’s cash flow and value creation. Due to the deep correlation between enterprise value and investment behavior, the efficiency of enterprise investment behavior affects the normal business value creation.In the real world, companies are facing’credit constraints’and’debt hanging cross’caused by asymmetric information. Meanwhile, for increasing compensation and prove themselves the management need expanding business continually, exceeding the company’s actual needs. Combined with managers themselves lazy and motivation for personal gain, and moral hazard hidden behind the investment decision, the paper assumes that inefficient investment widespread in China. In China, state-owned enterprises have’double identity’-enjoying support from policy, also bear from’efficiency loss’.In addition, the’political association’ of state-owned enterprises and the excessive intervention of local governments also have an adverse impact on business investment decisions, followed by assuming the national nature of equity and enterprise value negatively correlated. According to Wooldridge (1988) study, when companies disclose the purchase of plant equipment, new product introduction or increase R&D spending news, stock prices generally rise. This paper argues that corporate investment news is’good’ reflection, and the’herd behavior’of investors is the beginning of positive energy cycle. Conversely, lack of investment results investors’ confidence down, ultimately declines the corporate value. This article assumes that excessive investment can contribute to corporate value, the lack of investment and enterprise value is negatively correlated. Because of the strong financial background and policy support of state-owned enterprises, its market confidence is high for its release signal (Linna,2011). In both cases, investment decisions more rapidly reflect in the corporate value, so this article assumes the state-owned enterprises will be more intense in above performances.In the empirical part, this paper draw lessons from La Porta(2002), the nature of the equity in the standard of ’the ultimate controller’, China’s listed companies can be divided into the "state-owned equity" and "non-state-owned equity". At the same time, according to Richardson’s (2006) measurement model of the inefficient investments, use "excessive investment" and "underinvestment" category to reflect the degree of inefficient investment of listed companies. Further, select2007-2012data screening of Chinese main board market listed companies, use equity and the inefficient investment as the explained variable to build panel data regression model, by the results of the data analysis carried out the proposed interpretation and verification for the assumption. Results show that our country widespread inefficient investment behavior of listed companies, and inadequate investment appear a bigger probability; compared to the non-state-owned equity, state-owned equity properties are negatively related to enterprise value; over-investment behavior is positively related to the enterprise value, state-owned enterprises presenting stronger; inadequate investment behavior is negatively related to the enterprise value, state-owned stronger too.Finally, based on theoretical analysis and empirical test results, provide many suggestions such as transformation of government function, perfection the listed company’s investment decision-making mechanism, exert external supervision and improving the state-owned enterprise management personnel evaluation criteria and so on. At the same time, analysis the deficiency of this study and the direction of further research, so as to the current reform of state-owned enterprises and the realization of enterprise assets value to provide more feasible suggestion.