| Under the current economic background,the decisive role of the market in resource allocation is more and more obvious.As a micro-economy in the market,listed companies’ high-efficiency investment behavior can not only promote their long-term development,but also be the key to maintaining stable growth of the national economy.It is a means of effectively allocating social resources.As a result,the company’s investment decisions have been valued by many scholars.However,a large number of studies have found that for various reasons,it is difficult for companies to truly make scientific and rational investment decisions,so the phenomenon of inefficient investment is common among listed companies.Management is the main body of the formulation and execution of investment decisions of listed companies.It has a large amount of internal information resources.They have the opportunity and motivation to choose their own investment projects,which makes the investment decisions lose their scientific and objective nature,thus damaging the interests of shareholders and the company..As the power of management is gradually increasing,its self-interested behavior in investment activities will become more prominent.On the other hand,with the introduction of a series of internal control policies and regulations in China,more and more managers are beginning to realize their role in modern corporate governance.High-quality internal control can reduce management’s behavior by optimizing the efficiency of information transmission and communication,and strengthening internal supervision,reducing its rent-seeking behavior in investment activities,thereby improving the company’s investment efficiency and promoting the company’s long-term development.Based on this,based on the Richardson investment model,this paper selects the data of A-share listed companies in Shanghai and Shenzhen in 2013-2017,and empirically studies the relationship between management power,internal control quality and non-efficiency investment.The study found that:(1)management power is significantly positively correlated with non-efficiency investment and its impact on over-investment is more significant.Excessive management power gives management motivation and opportunity to make them more likely to be self-interested.Neglecting the company’s interests leads to the emergence of inefficient investment phenomena.(2)The higher the internal control quality of the company,the more effective it can suppress its non-efficiency investment behavior,especially the phenomenon of under-investment.(3)High-quality internal control can effectively weaken the influence of management power on under-investment,while the suppression of excessive investment is not significant,and management power and internal control have mutual checks and balances.Finally,based on theoretical analysis and hypothesis verification,this paper puts forward the following suggestions:establish and improve the company’s internal control system;reduce management power;play the supervisory role of independent directors;establish a reasonable executive compensation incentive mechanism. |
