Research On Listed Companyies' Over-investment Problems From Views Inside A Company

Investment activities take a pretty important position during one corporation's business.Over-investment refers to an inefficient investment decision-making that the company accepts investment opportunities that are not optimal for the company's value,including projects with net present value less than zero,thereby reducing the efficiency of capital allocation.In recent years,China's gross domestic product has been in a state of sustained growth.Economic environment stimulates the investment behavior of various types of enterprises.A large number of enterprises began to spend more money for investment,including not only use their own self-accumulation of funds,but also use external financing,like bank loans,bonds issued,issued shares in the form of funds to leverage investment.Managers are the important makers and performers of enterprise investment dec ision.The separation of managers and owners from the two powers will seriously lead managers to make non-optimal investment decisions,including the financial status of enterprises,the level of debt,shares and other factors may have an impact on the excessive investment behavior of managers.Therefore,explore the impact of excessive investment factors from the perspective of managers controlling,control over-investment from the source.Therefore,this paper attempts to discuss the factors that can infl uence over-investment of enterprises from the management point of view,so as to control the excessive investment level and reduce the agency cost.This paper defines the concept of overinvestment of enterprises,and analyzes the factors influencing over-investment of managers by using the principal-agent theory,the free cash flow theory and the information asymmetry theory,then put forward the hypothesis of this study.This paper uses Richardson's classical model to establish the regression model.At the same time using A-share listed companies as the research samples,and take the over-investment level as the explanatory variables.Finally making analysis according to the regression results.The empirical results show that the ratio of enterprise assets and liabilities,free cash flow,return on investment,dividend distribution rate,shareholding of major shareholders,executive holdings,CFO whether to enter the board and the proportion of independent directors will have an impact on the excessive investment level.Combined with the results of empirical research,this paper gives practical recommendations in corporate governance.