Research On Effect Of Listed Companies’ Debt Structure On Inefficiency Investment

The discretion of the enterprise’s investment efficiency directly determines the development and valve of the enterprise. Rational investment not only increases the value of the enterprise itself, but also makes more reasonable resource allocation, and promotes the healthy development of the industry and the whole economy. Debt financing has become one of the main sources of funds of listed companies in the process of enterprise investment and played an important role in investment decisions. Due to differences in the debt maturity, type of debt and debt level, theirs impacts on the inefficiency investment behavior of listed companies are not the same. Therefore, research on the function mechanism of debt structure on enterprise’s inefficient investment, not only enriches the theory of enterprise finance, but also has significant implications on optimizing firms’ investing decisions.Based on the panel data of Chinese listed companies during 2006 to2013, this paper studies the effect of debt structure on inefficient investment of enterprise, and also examines the impact of the characteristics of ownership on this effect based on Richardson(2006).Empirical results can be stated as follow:(1) variables of debt level, debt maturity structure and bank loan don’t have obvious effect on financial governance for over-invest. After introducing the dummy variable, the conclusion remains the same.(2) Apart from long-term loan debt levels,variables of short-term loan and debt type structure lead to the insufficiency of enterprise investment, while the variables of debt level,short-term loan and bank loan of State-owned enterprises also have inhibitory effect on the insufficiency of enterprise investment even after the ownership dummy variable introduced.This study is a significant reference not only for enterprise to design debt structure, but also for financial institutions to make reasonable loan decisions. Moreover, it can instruct companies to perfect governance construction which can exert the function of internal control,and to formulate rational compensation systems or incentive mechanism.