Research On The Relationship Between Ownership Structure And Over Investment

In recent years,many scholars believe that Chinese economic growth is highly dependent on investmentwith the high growth trend of the economic and the rapid growth of investment closely linked.Overheated and blind investment have become the major issues in the process of Chinese economic development.From the micro-point of view,there is a serious overinvestment in our enterprises.The original purpose of the investment decision is toincrease the profit on the part of the company's business.In order to revitalize the idle funds,companies put moneyon the projects which have considerable income,increasing the additional revenue in this way.However,for some reason,it will lead to irrational investment decisions and may lead to overinvestment.Over investment will not only harm the interests of shareholders,resulting in capital,but also will hinder the long-term development of the company,facing the risk of collapse or closing.The emergence of a large number of over investment will lead to waste of productivity and social resources,and even lead to the collapse of the economy.Over investment is an important issue to be solved urgently fromboth the macro and micro point of view.Therefore,it is urgent to find effective measures to curb the occurrence of excessive investment behavior.On the basis of reading a large amount of literature,this paper finds that the change of ownership structure will have a significant impact on the over-investment level,so the depth of the relationship between the ownership structure and over-investment will be discussed below.This paper first summarizes the domestic and foreign literatures on the ownership structure and over-investment related fields,and then refers to the related basic theories such as principal-agent theory,information asymmetry theory and corporate investment theory,and finally deepens the understanding of the field.Then,by sorting out and analyzing the relevant investment data of listed companies in China in recent years,this paper puts forward the hypothesis that the phenomenon of excessive investment in China.Combined with previous literature,the paperanalyzes the correlation between ownership concentration,equity balance,management shareholding ratio,equity nature and over-investment respectively,putting forward the relevant hypothesis.Next,this paper selects 4290 sample data of A-share listed companies from 2013 to 2015 as the research object,drawing the conclusion through the two models of the regression analysis of the data and verifying the hypothesis.The first model is based on the Richardson(2006)moderate investment model,in which the positive residualvalue is just the excessive investment.The second model takes the ownership structure as an explanatory variable,distinguishing the overinvested data from the state-owned listed companies and non-state-controlled listed companies into empirical research.The empirical results show that there are over-investment phenomena in China.In the study of the correlation between equity concentration and over-investment,it is necessary for non-state-controlled listed companies to appropriately increase the concentration of ownership so as to reduce the over investment level.And the state-controlled listed companies need to reduce the concentration of equity to prevent over investment behavior,which is on the ground of the distinctive characteristics of Chinese state-owned enterprises.In terms of the balance of ownership and the proportion of managerial ownership,improving their shares in the company can effectively restrain excessive investment behavior.According to the empirical results,this paper puts forward some suggestions to restrain over investment,so as to safeguard the rights of shareholders,protect the interests of the company,and maintain the sustained and healthy development of the economy.