CFO Financial Execution And Inefficient Investment Of The Enterprise

Investment activities are one of the key financial activities of an enterprise.Effective investment can enable enterprises to form scientific resource allocation,bring stable and substantial cash flow to the future of the enterprise,and help enterprises achieve the goal of value added and sustainable development.However,the problem of non-efficiency investment is widespread in Chinese enterprises.On the one hand,excessive investment makes the overcapacity industry occupy more market capital,resulting in waste of resources and restricting the efficiency of resource allocation.On the other hand,insufficient investment makes the enterprise give up excellent investment projects,losing good development opportunities.How to effectively restrain the non-efficiency investment behavior of enterprises has always been a difficult problem to be solved in the practical and theoretical circles.CFO is the product of modern enterprise system.Its functions mainly include strategic support and supervision and control.It is one of the important strategic decision-making and implementation of the company.CFOs should give full play to their professional functions in the process of enterprise investment decision-making,guide enterprises to rational resource allocation,and improve the efficiency of resource allocation.However,in reality,CFOs are often limited by their lack of ability and power,which makes their functions unsatisfactory.Therefore,in order to give full play to the professional functions of CFOs,it is necessary to enhance their financial execution in many aspects.From the perspective of CFO ability and power,this paper constructs the CFO financial execution index and examines the impact of CFO financial execution on nonefficiency investment to provide a basis for improving the investment efficiency of enterprises and the construction and improvement of CFO system.At the same time,the internal and external environments faced by enterprises are not the same.The research on investment efficiency should also consider internal and external environmental factors.When enterprises face different internal and external governance environments,the impact of CFO financial execution on non-efficiency investment may be different.Therefore,this paper incorporates the internal power concentration and external marketization process into the research framework,and further explores the impact of CFO financial execution on the investment efficiency of enterprises under different power concentration and marketization processes.In order to study the influence of CFO's financial execution on corporate inefficient investment behavior and the difference of influence effect in different power concentration and marketization process,this thesis adopts classical theory such as principal-agent theory,information asymmetry theory and high-order management theory.On the basis of this,the relationship between CFO financial execution and corporate inefficient investment,and the influence of power concentration and marketization process on the relationship between the two are theoretically analyzed,and three assumptions are proposed.In the empirical test section,this paper selects the ShanghaiShenzhen A-share listed company in 2012-2017 as the research sample.After screening and eliminating according to certain principles,the statistical analysis software such as STATA14.0 is used to construct the CFO financial execution index by principal component analysis.On this basis,multiple regression analysis and other methods are used to test the relationship between CFO financial execution and non-efficiency investment.At the same time,in order to further explore whether there is a difference in the degree of influence of CFO financial execution on non-efficiency investment under different power concentration and marketization process,this paper will group sample companies according to different power concentration and marketization process respectively to test the hypothesis.The results of the research show that:(1)CFO financial execution is negatively correlated with corporate non-efficiency investment.Factors such as the CFO tenure and the internal director's concurrent appointment determine the size of the CFO's financial execution.CFOs with higher financial execution can improve the investment efficiency of the company.(2)The restraining effect of CFO financial execution on non-efficiency investment is more significant in enterprises with low power concentration;(3)The restraining effect of CFO financial execution on non-efficiency investment is more significant in enterprises with low marketization.The conclusions of this paper indicate that enterprises can improve the financial execution ability of CFOs and establish an effective and sound CFO system from the aspects of giving CFO directorship and so on.In addition,the impact of CFO's financial execution on non-efficiency investment is different in different internal and external environments.It is necessary to pay attention to environmental factors such as internal power concentration and external marketization.