Managerial Ability,Internal Control And Investment Efficiency

Investment decision-making has an important impact on the sustainable operation of enterprises.Effective investment is not only the main cause of increase in cash flow,value growth and sustainable development of micro-enterprises,but also the cornerstone of national wealth growth and social welfare improvement.In a perfect capital market,investment efficiency depends on the profitability of the invested assets,and the firm invests at the optimal investment level where the marginal cost is equal to the marginal return.However,in reality,the assumptions of the perfect capital market are not satisfied,which leads to the actual investment deviating from the optimal investment scale and generating inefficient investment,which is manifested as under-investment and over-investment.The above inefficient investment issues not only hindered the development of micro-enterprises,but also became an important source of China's economic structural imbalance,overcapacity and high leverage of some enterprises.Therefore,how to improve investment efficiency has become the focus of attention in the theoretical and practical circles.It is not difficult to find out that people and institutions have a major impact on corporate investment decisions.People with strong capabilities can use enterprise resources reasonably and effectively to improve their investment efficiency,but they also have the motivation and opportunity to build their own "manager empire" Cause over-investment.A good system not only has the function of improving investment efficiency,but also promotes people to play a more positive role and suppress the bad side of people,thereby further improving the efficiency of enterprise investment.Based on this,this paper takes the A-share listed companies in Shanghai and Shenzhen as the research samples,focuses on the two aspects of the internal people and the system,and discusses the relationship among managerial ability,internal control and investment efficiency from the two paths of information asymmetry and agency problems.The study found that:(1)Although the inefficient investment of listed companies in China is more under-investment,the degree of over-investment caused by agency problems is even more serious.(2)High-capacity management helps to alleviate information asymmetry and curb under-investment;high-capacity management can also lead to prominent agency problems and increase over-investment.(3)High-quality internal control can effectively curb over-investment and under-investment,thereby improving the efficiency of enterprise investment.(4)Regarding the relationship between management ability,internal control and investment efficiency,the study found that high-quality internal control can weaken the positive correlation between managerial ability and over-investment,and enhance the inhibition of managerial ability on under-investment.(5)Further research found that in state-owned enterprises,the inefficient investment is more characterized by over-investment,and there is a significant positive correlation between managerial ability and over-investment,and internal control has a significant inhibitory effect;in private enterprises,managerial ability is overly positively correlated with over-investment and negatively correlated with under-investment,but internal control only works in under-investment groups.In the enterprises where the chairman and the general manager are concurrently,the managerial ability and over-investment are significantly and positively correlated,but the internal control inhibition effect is not obvious.Internal control can play a good role in the non-partners of the chairman and general manager,and inhibit positive correlation between managerial ability and over-investment,promote a negative correlation between managerial ability and under-investment.The possible innovations and contributions of this paper are:from the perspective of research,this paper studies the relationship between managerial ability and investment efficiency from the perspective of principal-agent problem and information asymmetry.Compared with the previous literature,expanding the research perspective of managerial ability and investment efficiency.In terms of research ideas,this paper attempts to construct a comprehensive research framework,including information asymmetry,principal-agent and management factors into the research framework,and internal control as a governance mechanism is also included in the framework,to find the factors that impact to investment efficiency.In addition,while enriching the literature on managerial ability,internal control and investment efficiency,this paper also has certain reference significance for improving the investment efficiency of listed companies,optimizing the employment management decision of enterprise management and verifying the implementation significance of China's "Basic Norms of Enterprise Internal Control".