The Impact Of Private Equity Accredited Director On Firm Investment Efficiency

At present,China's capital market is still not perfect enough,especially in the GEM market.The principal-agent problem and information asymmetry are still widespread.The high cost of external financing gives great pressure to enterprises.Under these circumstances,the enterprises are unlikely to make fully effective investment decisions while their overinvestment and underinvestment have always existed.This greatly impairs the value and long-term development potential of the enterprises.Based on the data of GEM listed companies from 2013 to 2017,this paper establishes a model based on the Richardson's paper.This paper compares and analyses the differences in investment efficiency between private equity and directors accredited by private equity,as well as the effects of different character of directors accredited by private equity.The results show that:(1)in the GEM,the participation of private equity in enterprises does not significantly improve the efficiency of enterprise investment;(2)the directors of private equity,as active investors,can significantly improve the efficiency of enterprise investment,restrain over-investment and alleviate underinvestment.(3)Further,considering the different character of the directors of private equity,this paper finds that more board seats for private equity significantly improve the efficiency of corporate investment.And those with higher age can inhibit the overinvestment behaviors of enterprises and reduce the underinvestment behaviors of enterprises.Moreover,when private equity appoint directors with higher educational background to participate in corporate governance,corporate underinvestment be alleviate.From the perspective of private equity participating in corporate governance,this paper discusses in detail the impact of different behaviors such as the appointment of directors of private equity on the investment efficiency of enterprises.It is a further deepening of the research in the field of post-investment governance of private equity.It puts forward suggestions for achieving win-win situation between private equity investment institutions and enterprises as well as an effective investment reference project for other external investment of enterprises,which has certain practical significance.