Over-financing And Inefficient Investment Of Listed Companies

The initial over-financing of listed companies is a normal state in China’s capital market.Since 2009,the proportion of over-financing companies has reached 46.57%,and the average over-financing rate has reached 42.05%.The emergence of large-scale over-financing of listed companies has affected the financing needs of other high-quality companies,which has aroused a lot of concern from scholars and the public about the correlation between over-financing and inefficient investment.And since 2012,the regulatory authorities have gradually strengthened the requirements for disclosure of information in the issuing links and the responsibilities of the intermediary organizations,and clearly proposed to strengthen the disclosure of the project of investing in raised funds and related investment risks.The following supervision of raising funds introduced tripartite supervision for the first time,opened special supervision and law enforcement action and introduced supporting punishment measures.Under the circumstance of stricter regulatory policies,whether the relationship between over-financing and the company’s inefficient investment has changed needs further study.Based on the market failure theory,information asymmetry theory,principal-agent theory and free cash flow hypothesis,this paper takes 934 over-financing companies listed in the market from 2007 to 2014 as the research objects and their data from 2008 to 2017 as the observed values,using multiple linear regression methods to explore the relationship between over-financing and inefficient investment,regulatory policy adjustments on the relationship between over-financing and inefficient investment,and the impact of property rights and industry factors on these relationships.This paper first studies the relationship between over-financing and inefficient investment and the impact of property rights.Then,it studies the changes of the relationship between over-financing and inefficient investment before and after the regulatory policy adjustment,considering the influence of property rights and industry factors.The study found that the over-financing of listed companies is significantly positively correlated with inefficient investment.Compared with state-owned enterprises,the positive correlation between non-state-owned enterprises’ over-financing and inefficient investment is more significant.On this basis,the positive correlation between over-financing and inefficient investment in the tightening period of regulatory policies is weakened.In the period of strict regulatory policies,the positive correlation between over-financing and inefficient investment of non-state-owned enterprises is weakened,and the degree of weakening is greater than that of state-owned enterprises.In the period of tighter regulation,the positive correlation between over-financing and inefficient investment in industries whose average over-raising rate is higher than that in the market is weakened,and the degree of weakening is greater.The conclusions of this paper have certain reference significance for the regulatory authorities to issue regulatory policies based on property rights and industry,strengthen supervision and enforcement activities,and deepen the current regulatory model.