Study On The Peer Effect Of Over Investment Of Listed Companies

Investment is one of the common and important behavior decisions of enterprises,whether correct or wrong,investment decisions will have an impact on the development prospects and profitability of the company,and then play a key role in the value and follow-up development of the enterprise.Specifically,the correct investment decision can make the company scale continue to grow,increase the company’s operating income and net profit,and increase the company’s share in the market;wrong investment decision will probably increase financial risks and management risks.Therefore,it is particularly important to make investment decisions scientifically and rationally,over-investment is an inefficient investment form that does not achieve Pareto optimization.With the "three go,one drop,one supplement" and the deepening of supply-side structural reform,scholars gradually focus on this form of inefficient investment in corporate investment behavior,and over-investment has become a problem that needs to be solved to promote the upgrading of industrial structure.When analyzing corporate investment decisions,the traditional enterprise theory mostly studies and analyzes the enterprise itself as an isolated individual without contact with the outside world or only from the perspective of external environment,without paying attention to the impact of other enterprises on itself.In an open market economy any enterprise cannot exist alone,and the surrounding information and environment will always affect the behavior of enterprises invisibly,and enterprises in the same industry will also affect the decision-making behavior of individual enterprises,we call the convergence of enterprise behavior caused by this influence as "peer effect".Is there a "peer effect" in the over-investment behavior of listed companies? What is the formation mechanism? The solution of these problems has great theoretical significance and practical value to understand the influencing factors of over-investment in listed companies.Based on the perspective of peer effect,this paper selects the financial data of 3581 listed companies listed on Shenzhen Stock Exchange and Shanghai Stock Exchange from 2001 to 2018 as samples to study the impact of peer effect on corporate over-investment,and analyzes its formation and inhibition mechanism.The research shows that:(1)when making over-investment decisions,listed companies will be influenced by other companies in the industry,that is,there is the peer effect inover-investment of listed companies.(2)On the basis of peer effect,we examine the internal mechanism of the peer effect of overinvestment in listed companies,and find that the imitative behavior of listed companies,the overconfidence of managers and agency cost are the important factors of the peer effect of overinvestment,and analyst tracking mechanism and competition mechanism can effectively restrain the peer effect of over-investment.(3)Finally,according to the conclusion of this paper,we put forward some policy suggestions to weaken the peer effect of over-investment in listed companies.First of all,it is necessary to improve the information disclosure system and supervision system,and give full play to the role of analysts in information disclosure and external supervision.Secondly,it is necessary to promote the process of marketization construction and improve the degree of marketization of the industry.Market regulators should simplify administration and delegate power,reduce intervention in the market,give better play to the regulatory role of the market itself,give full play to the role of market competition,and make enterprises aware of the pressure of the market,so that each enterprise in the industry can give full play to its own comparative advantages,and use innovative means to deal with the problem of over-investment.At last,we should actively explore a more effective incentive mechanism and reward and punishment mechanism,take multiple measures to protect the consistency of interests between the company managers and the actual owners of the company,and reduce the blind expansion of managers out of self-interest.