Research On The Relation Between Ceo Duality?earnings Management And Investment Efficiency

Enterprise investment decision-making is the most important part of financial decision-making,which affects the financing decision and dividend decision directly,and are closely related to the survival and sustainable development of enterprises.Investment efficiency is an important indicator of whether the financial decision is correct or not.In the aspect of the overall operation,if the investment decision is good,then the investment efficiency of the enterprise will be high,and it will provide the firm with strong driving force.However,due to agency problem,information asymmetry and other issues,low investment efficiency are prevalent in China's listed companies,mainly performance are the insufficient investment and over-investment.Insufficient investment refers to situation that the management give up some projects which have positive net present value,while over-investment means management invest on projects whose net present value is negative and waste the corporate resources.So the investment efficiency has always been a hot topic in academic research.While earnings management and the CEO duality becoming more and more concerned,the research of whether they are linked to the investment is lack.Based on this,this paper will study the impact of earnings management and the CEO duality on the investment efficiency of listed companies in China.Then,this paper will divide samples into state-owned enterprises and non-state enterprises according to the nature of enterprise ownership to get more details.Based on the theories of "principal-agent theory","information asymmetry theory","free cash flow hypothesis",and"certification contract theory",using the data of China's A-share listed companies from 2009 to 2015 as a research sample,this paper study the influence of earnings management and the CEO duality on the investment efficiency of listed companies in China on whole sample and sub-samples which are state-owned enterprises and non-state enterprises.The study found that:(1)the CEO duality and the higher the degree of earnings management,the lower the efficiency of business investment.(2)In non-state-owned enterprises,the impact of the CEO duality and earnings management on investment efficiency is more pronounced.