Industrial Policy,Policy Follower And The Corporate Investment Efficiency

In corporate finance,investment efficiency has always been a key area of research both at China and foreign countries.However,most literatures do research on macro-economic policies and micro investment behavior independently,neglecting the connection between macro-economy and micro behavior.In fact,the investment behavior of the company is a combined result of the external economic environment and internal characteristics.When study corporate investment behavior,we should consider the impact of changes in resource allocation caused by government policy interventions.Under the background of strong government intervention in China,it is valuable to study the impact of industrial policies on the investment behavior and investment efficiency theoretically and practically.At present,China is in the stage of industrial restructuring and upgrading.National policies such as supply-side structural reform,the elimination of backward production capacity and the release of advanced production capacity are steadily advancing in which industrial policies play a crucial role.By using the industrial policy,the government can guide the enterprises to follow the policy of investment,optimize the allocation of resources and promote the upgrading of the industrial structure.However,if industrial policies are implemented improperly,the phenomenon of investment surge will also occur so that the investment efficiency of companies will decrease.Based on above background,this paper studies the relationship among industrial policy,policy followers and investment efficiency from the perspective of corporate finance.It also differentiates the different effects of the impact on the state-owned and non-state-owned enterprises.Based on the financial data of Chinese A-share listed companies from 2001 to 2015,this paper starts with the three "five-year plans" of the central and 31 provinces in the "10th Five-Year Plan","11th Five-Year Plan" and "12th Five-Year Plan".It empirically analyzes the impact of China's industrial policy on the corporate investment and investment efficiency.It also studies how following behaviors effect the company's investment efficiency.The study found that supportive industrial policies will enhance the investment level of private enterprises,but reduce its investment efficiency,and the effect of central industrial policies is more significant than that of local industrial policies.However,the study found that the investment behavior and investment efficiency of state-owned enterprises are not affected by industrial policies.The study also found that following behaviors of central and local policies will significantly reduce the company's investment efficiency.This conclusion is both established in the state-owned enterprises and private enterprises.According to the study,we come up with some related policy proposals.