Research On Enterprise Network Characteristics And Investment Efficiency

Enterprise’s investment efficiency is related to the survival and development of theenterprise, higher investment efficiency reflects on better investment decision. Therefore,analysis the influencing factors of investment efficiency from different aspects hassignificant impact on the healthy and orderly development of enterprise. Social networktheory emphasizes the personal behavior depends on the behavior of others, they changetheir preference and decision according to the behavior of others. As a result, this articlewill use the perspective of social network analysis create an enterprise network through thesame director employed by different companies. This article will also investigate therelationship between the characteristics of enterprise network and investment efficiency.Hopefully, to be able to help enterprise investment decision problem, improve theinvestment efficiency of enterprises and make enterprises continue to grow stronger.This article studies how enterprise network characteristics impact on investmentefficiency. Firstly, review the literature about enterprise investment efficiency and thesocial network, this article elaborates the social network on the basis of related theory,principal-agent theory, and the theory of free cash flow. Secondly, create the enterprisenetwork for the same director employed by different enterprise and analysis the centerdegree, the between degree, the structure hole index. Using Richardson investmentexpectation model find out residual, to measure the investment inefficiency of enterprise.Finally, this article hypothesis is based on the theoretical analysis and the relationshipbetween enterprise network characteristics and investment efficiency. By using regressionmethod and the data in Shanghai A-share listed companies in our country in2011, analysisthe relationship between the enterprise network characteristics and the investmentefficiency, verify the hypothesis and the corresponding conclusions.Empirical study results show that a higher center degree, between degree, thestructural hole index leads to a higher enterprise investment efficiency. By distinguishoverinvestment and underinvestment, a higher center degree, between degree, thestructural hole index help to alleviate the underinvestment and curb excessive investment. This research results will help enterprises from the perspective of social network analysisto improve the investment efficiency and improve the enterprise value.