The Impact Of Internal Control On Inefficient Investment From The Perspective Of Life Cycle

Effective investment is the driving force of enterprise growth and the engine to stimulate economic growth,but the long-term existence of inefficient investment behavior in our market seriously deviated the company from the goal of maximizing corporate value,affecting the company's survival and long-term development,hinder the growth of the national economy,So how to effectively curb inefficient investment has been a hot topic in the academic and practical circles.The existing research shows that agency problems and information asymmetry are the main reasons leading to inefficient investment and internal control as part of corporate governance can alleviate agency problems and information asymmetry and inhibit inefficient investment.However,the existing researches are only based on the general relationship between internal control and inefficient investment at a certain time point in the market,ignoring the differences in organizational structure,operational and financial risks and strategic objectives in different enterprise life-cycle contexts.These differences affect the agency problem,the degree of asymmetric information and the impact of internal control quality.This paper considers that the impact of internal control on inefficient investment in different life cycle contexts may be different,so the life cycle perspective is added to the study of the relationship between internal control and inefficient investment in order to further analyze how the internal control will act on Inefficient investment.This paper takes 2012-2014 manufacturing companies in Shanghai and Shenzhen A-share as samples.Firstly,introduces the principal of agent theory and asymmetric information,and then analysis the motivation that led to insufficient investment and overinvestment;Secondly,analysis how internal control suppress the non-efficiency investment in the perspective of internal controls 5 elements and put forward assumptions;then,sort out the collected 2964 samples of data,examine internal control's impact on business inefficient investment by descriptive statistics,correlation analysis and multiple regression analysis,and based on different life cycle the difference influence of internal control,while,this paper conducts robustness tests by changing the sample and converting variable indicators.The results show:(1)Non-efficiency investment is pervasive among manufacturing listed companies in our country at the present stage,and the number of terms underinvestment behavior is more common,the degree of overinvestment deviates from the normal level of investment is greater.(2)The quality of internal control has significant negative correlation with the degree of inefficient investment,that is to say,the higher the quality of internal control the lower the level of inefficient investment,internal control has a significant inhibitory effect for inefficient investment;and internal control's inhibitory effect for overinvestment is greater than underinvestment.(3)The degree of inhibition of internal control to inefficient investment is different in different enterprises' life cycle.The concrete expression is as follows:the internal control has significant inhibition for inefficient investment in growing and maturity period,but the effect is not significant in decline period.