Managerial Discretion,Institutional Investors Shareholding Characteristics And Inefficient Investment

As one of the dominant ways of determining resource allocation and interest coordination,the question of management's discretion has been the focus of economists and managerialists.When the enterprise is in the background of stronger executive decision power,the direct and potential impact of executives on the organization is greater.It can be said that executives are determined to survive and develop by controlling the investment,financing and operation of the enterprise.In recent years,with the continuous development of economic,the overall investment scale of our country is expanding.According to the National Bureau of statistics data show that the national fixed asset investment reached 596501 billion yuan in 2016,up 8.1 percent year on year.In addition to the physical investment,the listed companies in China also have the investment boom of financial products,entrusted loans and securities investment.Therefore,whether the enterprise under the executive control can effectively and rationally configure the enterprise resources to achieve investment balance,and the related executive power balance has become a topic worthy to be discussed.Since the 21st century,the global capital market is gradually expanding,institutional investors also occupies a place,in China,with the CSRC gradually open the market,provides an opportunities for "extraordinary development of institutional investors".The scale of institutional investors has grown to become the capital of power which cannot be ignored in China's securities market.The emergence of institutional investors has diversified investor structure,as well as a"stabilizer" in the stock market,reducing the volatility of capital markets.Institutional investors' shareholding dynamics has become an "indicator" of the securities market,which has attracted the attention of various analysts and investors.With the scale of institutional investors in the capital market is constantly expanding,and the degree of professional background also makes it in the listed company's voice and participation to get attention,playing a role in the supervision and governance are also increasingly prominent.Based in 2013-2015 the A-share listed companies of Shanghai and Shenzhen stock markets as the research object,using principal-agent theory,manager power theory,behavioral finance and other related theories,this paper discusses the problem of non-efficiency investment in the condition of executive determination of listed companies in China,namely the influence of excessive investment and insufficient investment,and further considers as one of the effects of corporate governance factors,whether institutional investors could constraint executives discretion and influence its investment decisions,as a supervision and restriction corresponding role,thus improve the effectiveness of corporate governance and the investment efficiency.The results show that there existed a large inefficient investment issue in our country.(1)The expansion of executive decision-making power will aggravate the non-efficiency investment of enterprises;(2)the overall shareholding of institutional investors can significantly inhibit the positive correlation between executive determination and non-efficiency investment;(3)stable institutional investors compared to transactional institutional investors are more effective in controlling the positive relationship between executive decisions and non-efficiency investment in enterprises,and are effective supervisors of listed companies;(4)pressure resistant institutional investors will inhibit the positive relationship between executive determination and non-efficiency of enterprise investment.In contrast,pressure-sensitive institutional investors do not have a governance role for executive decision-making and are ineffective supervisors of listed companies.This paper consists of the following six chapters.The first part is the introduction.This article takes the research background and the research goal as the breakthrough point,expounds its theory and the practical significance,and on this basis introduces the innovation and contribution of this article,and puts forward the research ideas and research methods of this paper.The second part is literature review.By reviewing the related theoretical and empirical literatures among the management discretion and the investment efficiency and institutional investors,it discusses the progress and direction of the relevant research field,summarizes and reviews the literature and clears the research idea of this paper.The third part,the theoretical analysis and research hypothesis,including the definition of the relevant concepts,integrates principal-agent theory,managerial power theory and behavioral finance theory,puts forward the hypothesis of this research on the basis of relevant theories.The fourth part is research design.It mainly includes the hypothesis of research,the definition of variable and its quantification method,the selection and arrangement of sample structure,the construction of model and the method of data analysis.The fifth part is empirical analysis and results.This part focuses on descriptive statistics,correlation analyses and regression analyses were used for data analysis and processing,through the multiple regression model to verify the hypothesis,and provides support for the empirical data.By correcting systematic deviations of in inefficient investments,this paper conducts robustness test on correlation analysis.The sixth part,conclusion.According to the empirical analysis,the paper puts forward relevant policy opinions and forecasts the further research.Combined with the results of this study,this paper puts forward the following recommendations:(1)Improving the governance mechanism of internal control and external supervision;(2)From the personal characteristics of the manager,the enterprise reasonably controls the decision-making power of the executives;(3)To enrich the shareholding structure of listed companies and fully mobilize the supervision and administration of institutional investors;(4)Promoting the market competition mechanism of capital markets and professional managers;(5)To improve the quality of information disclosure.