The Largest Shareholder, Board Independence And The Investment Efficiency

In the modern theory of corporate finance, financing decisions, investment decisions and dividend decisions are the most important of the three decisions. Where investment decisions and is the basis for future cash flows as the main driver of the company’s growth and development, and to become the focus of research scholars at home and abroad, and achieved fruitful results:MM theory, based on the theory of over-investment and free cash flow hypothesis based on information lack of asymmetry hypothesis theory and other theories of investment. But now a variety of sophisticated investment theories are built on the western developed countries more mature capital markets, these theories emerging markets and transition economies markets, especially emerging economies typically like country apply?Since the reform and opening up, China’s economy developed rapidly, GDP growth is running high all year round, and investment as one of the most important Troika China’s economic development, its share of GDP up to70%, such a large scale the investment activities led China’s economic takeoff, but the investment impetus for economic growth, not just rely on the scale of investment, investment efficiency is more important, high-efficiency investments remain the foundation of economic activity is the key to a lasting and vibrant, but as listed companies to invest in the body of our society, to maintain efficient has important implications for improving the efficiency of investment in its investment efficiency.Listed companies to maintain a high-efficiency investments, and their sound corporate governance mechanisms are inseparable. Major shareholder governance, corporate governance board independence as the two most important aspects, the efficiency is significant investment in research on listed companies, this paper intends to be on the largest shareholder, board independence and efficiency of investment in listed companies to study the relationship between.In this paper, China’s non-financial sector in2007and2012data for the study sample of listed companies, focusing on the relationship between corporate governance of listed companies to invest in efficiency between the ratio of the first to study the use of the threshold model largest shareholder of listed companies is how they affect investment efficiency; using a multiple linear regression method panel board independence empirical test of the impact on listed companies to invest in efficiency; Finally, the double threshold value obtained by dividing the model range study to examine different intervals largest shareholder, the independent Board of investment differences and the impact on the listed company’s largest shareholder, depending on the nature of pay multiplied by constructing items, empirical tests of the different nature of the largest shareholder, the impact of board independence on whether differences in the efficiency of investment. The results show that:the ratio of (1) the largest shareholder of listed companies and investment efficiency was increased and then decreased after the first inverted "U"-shaped relationship, that is, when the largest shareholder holds less than44.8%, the largest the proportion of shareholders, the higher the efficiency of listed companies to invest, then the largest shareholder performance of "benefit synergistic" effect, and when the ratio of the largest shareholder is higher than44.8%, the largest shareholder holding the higher the proportion of shares, the lower the efficiency of listed companies to invest, then the largest shareholder performance as "entrench effect"; higher proportion (2) independent directors of listed companies to invest in lower efficiency, increase the Board’s independent directors of listed companies, and can not bring investments to improve efficiency; while separating the two roles of chairman and general manager of the company can promote the listing improve investment efficiency;(3) after considering the largest stake, the Board found that the independence of listed affect the company’s investment efficiency while also showing a range of effects, the ratio of the largest shareholder holds less than44.8%, the proportion of independent directors, the higher the efficiency of listed companies to invest in, and the first shareholding ratio is higher than44.8%of the time, the higher the proportion of independent directors, the lower the efficiency of listed investments; and after considering the nature of the largest shareholder,was found with respect to the proportion of independent directors of state-owned listed companies, listed companies to promote the role of private investment in efficiency is more significant.