| As an important part of promoting the economic development,investment has played a very prominent role in China's economic growth,which can be said to be one of the core driving forces in the past 40 years of reform and opening-up.According to the statistical data,the average annual growth rate of GDP and investment of fixed assets in China were respectively 9.73% and 18.85% from 1980 to 2018,both of which showed a high growth trend.However,according to the existing research results,there are a large number of underinvestment and overinvestment in China,leading to low investment efficiency,which is adverse to the longterm development of the economic level.Therefore,the academic community has paid much attention to exploring the factors affecting the decision of enterprise investment and how to reduce the inefficient investment of enterprises.The board of directors is the core organization of the daily management and long-term strategic decision-making of modern enterprises,which plays a very important role in enterprise investment.And the specific ways can be summarized as follows: to evaluate the market environment to formulate corresponding investment plans and provide support for managers,to supervise and assess the plan-execution of managers,and to obtain external key resources for enterprises.The level of board capital reflects the ability of directors to perform their functions,so the significance of board capital for enterprise investment is self-evident.At present,there are some deficiencies in the research on the impact of board capital on corporate investment in China,including the measurement of board capital is not in-depth,the impact mechanism is not perfect.As result,these aspects still need to be further studied.In order to further study the impact and mechanism of board capital on inefficient investment in enterprises,based on a sample of the A-share non-financial and non-ST listed companies in Shanghai and Shenzhen Stock Exchanges from 2013 to 2017,this paper uses Richardson's(2006)investment efficiency measurement model to measure inefficient investment,and takes directors' age,educational background,professional background,and tenure as the indicators to measure human capital of board of directors,also taking the parttime position of directors,financial experience,political resources and academic background as indicators to measure the social capital of the board of directors.Afterwards,this paper uses OLS regression to verify the impact human capital of the board of directors and the social capital of the board of directors on the investment efficiency of enterprises.Furthermore,based on the three functions of the board,this paper uses OLS regression test the mechanism of these two kinds of capital on inefficient investment.The empirical results show that the promotion of human capital and social capital of the board of directors can strengthen its functions of consultation & support,supervision and resource acquisition,and finally enhance the decision-making ability of enterprises to reduce the inefficient investment.In detail,the human capital of the board of directors restrains inefficient investment by enhancing the overall ability of the management team and improving the internal control system,which are respectively through the board's consultation & support function and supervision function;the social capital of the board of directors reduce inefficient investment by providing external key resource and strengthening the internal control system of enterprises,which are through the board's resource acquisition function and supervision function.Therefore,for one thing,directors should improve themselves from the perspectives of human capital and social capital to provide better services for enterprises;for another thing,enterprises should also select and evaluate directors from these two aspects to optimize the allocation and management ability of the board of directors,which will make the board contribute more to the future value-creation of enterprises. |
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