The Impact Of Institutional Shareholdings And Internet Control On The Investment Efficiency

Under the current background of economic stabilization,the key of national development still is to develop the economy,further,to improve the efficiency of corporate investment.In the perfect market theory of MM,the profitability of the project is the only reason of investment decisions.However,the inefficient investment of the enterprise is relatively common due to market friction.On the basis of previous research,Principal-agent Conflict and Asymmetric Information Problems are the major factors.With the development of Chinese capital market and policy,Institutional investors as powerful external supervision and the internal control as useful internal governance,can both effectively alleviate the above two types of problems.Therefore,Institutional ownership and internal control are both expected to affect the efficiency of investment behavior.Based on the 2011-2015 a-share listed companies of Shanghai and Shenzhen,the article constructs two levels of regression model by drawing from Richardson(2006)study,discuss the impact of Institutional investors,the internal control and interaction of the two items on the corporate investment efficiency.It turned out that,In the case of lack of investment,Institutional ownership and internal control can significantly inhibit the inefficient investment behavior,but the interaction of the two items had no significant effect;In the case of excessive investment,institutional ownership is positively correlated to the efficiency of investment,the internal control is significantly negative and so is the interaction,which indicates that well internal control can effectively weaken the institutional ownership role in promoting the efficiency of the enterprise investment.Through the research on the interaction of institutional ownership and internal control,this paper enriches the literature of the investment efficiency,provides the basis for development of institutional investors,urge enterprises to perfect the internal control system construction and execution.Combined with the empirical conclusions,this paper puts forward the policy recommendations of the following three aspects.First,improving the system of capital market and reduce government intervention to support the development of institutional investors;Second,promoting institutional ownership policies to encourage institutional investors to long-term development;Third,deepening enterprise internal control construction to improve the internal control system of perfect and execution.