Enterprise Life Cycle,Ownership Concentration And Inefficiency Investment

The investment effciency of listed companies has always been the focus in both theory and practice,building a reasonable corporate governance mechanism is an important guarantee to improve the efficiency of resource allocation.Separation of two rights in modern company,the ubiquity of "sole majority shareholder" and equity concentration,the conflicts between shareholders and managers and the conflict between the minority shareholders and large shareholders are coexist in listed companies in China.As an important part of the ownership structure,the ownership concentration affects the right of control and the right of earnings,it will bring about two effects-encouragement and infringement.However,in former literatures,the influence of ownership concentration on firm investment is not have a unanimous conclusion,there are even completely opposite findings.Since the view of enterprise life-cycle has been put forward,a growing number of relevant studies have introduced this factor.The main point of this theory is that the enterprises have the form of organism,at every stage of its development,the external environment,internal characteristics and operating conditions will show significant difference.Some research demonstrate that the influence of ownership concentration on firm value is life cycle dependent.However,the effectiveness of investment decisions is an important factor in determining the value of enterprises.By this token,the effect of ownership concentration on the efficiency of investment will vary with as the life-cycle of enterprises.So,how does the ownership concentration affect the inefficient investment?How the relationship between them will change at different life-cycle stages?To explore this problem,this thesis introduces enterprise life-cycle factor to study the influence of ownership concentration on inefficient investment at different stages.So that enterprises can give full play to the positive role of ownership concentration,and reduce the negative impact,thus inhibiting inefficient investment behavior of listed companies.This thesis collects the relevant data of A-share listed companies in China for 2011-2015,10004 samples were obtained after screening.And divide these samples into three groups:growth,maturity and decline,then test the correlation between ownership concentration and invest efficiency in the full sample and every life-cycle stage.The result shows:If life-cycle is not taken into account,ownership concentration has no significant impact on inefficient investment,after grouping on the life-cycle,the ownership concentration has different influence on investment efficiency with the evolution of life cycle.Concretely,for the growth sample,the ownership concentration is positively related to inefficient investment.At maturity,this two showed a U type relationship.for decline sample,there was no significant correlation between this two.Then,the sample was further subdivided into overinvestment group and underinvestment group.The increase of ownership concentration will result in an increase of underinvestment in growth enterprises.in maturity stage,the increase of ownership concentration can reduce the overinvestment level when the equity is dispersed,however,when the ownership concentration degree is high,the further increase of ownership concentration will lead to increase of overinvestment levels,it means the concentration of ownership and overinvestment are U related,in addition,for the sample of underinvestment,the increase of ownership concentration will raise its underinvestment level.in the decline stage,the increase of ownership concentration does not play a proper role in governance,but it may cause the large shareholders and manager's conspire and asset substitution,increase their overinvestment.The innovation of this thesis is that,firstly,most of the previous researches about the impact of ownership concentration on inefficient investment remain at the static level,this thesis introduces the enterprise life-cycle theory to research the relationship between ownership concentration and inefficiency investment,there are significant differences in the external environment and internal characteristics at every stage of enterprise development,it is of practical significance to verify the effect of ownership concentration on investment efficiency from this dynamic point of view.Secondly,there has been a great deal of researchs on ownership concentration and overinvestment in our country,but few resrarchs focus on underinvestment.In this thesis,the influence of ownership concentration on inefficiency investment is analyzed on the basis of life-cycle's difference,and the influence of ownership concentration on underinvestment and overinvestment at every stage is further studied,it has enriched and developed the research on the economy effect of ownership concentration and the influencing factors of investment efficiency.The contents of this thesis are arranged as follows:the first part is the introduction,introduce the research background and significance,the main framework of the article and the definition of related concepts of the thesis;the second part is the literature review,summarize the previous research and put forward the problem that this thesis wants to solve;in the third part,analyze the theory and then suggest several hypotheses;the fourth part includes study design;the fifth part include descriptive statistics and regression results analysis,the robustness test results are also reported in this section;the sixth part,summarize the conclusions of this thesis,put forward relevant suggestions and point out the limitations of this thesis and the direction of future research.