Market Competition、Equity Structure And The Research On Inefficiet Investment Of Family Firms

Investment decision is one of important enterprise financial management decisions, which has a vital influence on the survival and development of family enterprises. Investment efficiency is the result of investment behavior. Deviating from the reasonable investment scale decision may lead to inefficiency-investment, causing over-investment or under-investment, which will affect the long-term development of one enterprise. Family enterprises have a great difference with general public companies on the structure of corporate governance and the external environment. Are they the important factors for investment behavior and efficiency of family enterprises?This paper is based on the2010-2012family public companies data. With a combination method of normative research and empirical research and from perspectives of agency theory and the corporate governance theory, the paper tries to study from following three aspects:(1)Firstly, according to the classical inefficiency-investment model, this paper tries to prove the over-investment and the under-investment phenomenon widely exist in the family firms;(2)Secondly, based on the result of the inefficiency-investment model, this paper takes the level of this as the object of study. Through the establishment of model and tests, the paper talks about whether the equity structure is the one of the causes efficient-investment, which includes the level of equity concentration and equity balance;(3)Thirdly, according to the HHI, the paper classify the samples into two categories:high competitive industry and low competitive industry. Based on the verification family firms widely exist inefficiency-investment. The paper deals with the industry competition degree variable and find that in different market condition, the equity structure of family public companies still has effect on the level of inefficient investment with a different degree;(4)Finally, the paper introduces cross the multiplication influencing factor of industry competition degree and equity structure to analysis the internal logic relationship among market competition, equity structure and degree of inefficiency-investment.This paper obtains three conclusions as follows:(1)Inefficient investment is a common phenomenon for family enterprises, and the number of over-investment enterprises in family business is higher than the number of under-investment enterprises;(2)The equity structure is one of the main causes of non-efficiency of investment and the non-efficiency investment level is positively related to the family ownership level. At the same time, the non-efficiency investment level is positively related to the family ownership negatively related to the level of equity balance;(3)Market competition degree has a moderate effect on the relation between equity structure and the non-efficiency investment level of family enterprises. More competitive market enhances the positive relationship between the family ownership level and the non-efficiency investment level of family enterprises, which can be considered as a negative impact of behaviors dealing with the fierce market competition. In addition, more competitive market weakens the negative relationship between the family ownership level and the non-efficiency investment level of family enterprises.