Research On The Economic Consequences Of A Company Introducing Industrial Investment Fund

"Lack of core and less soul" is a major problem to be solved urgently in China.Domestic traditional economic model to our country economy development of less and less,and even produce negative effect,at the same time,the current international business environment is seriously deteriorated,the crazy sanctions on China’s high-tech enterprises,forcing our country must be under the current complex international environment,based on the present economic development and industrial structure,promote the economic transformation and upgrading of industrial structure.The state and relevant provincial government agencies shall set up industrial guidance funds to invest in relevant enterprises,so as to play the guiding and promoting role of industrial investment funds;However,as the product of the socialist market economy with Chinese characteristics,the industrial investment fund has not a long history of development,and its theoretical research is relatively short.The relevant theoretical research in China mainly focuses on the macro level,such as the nature,operation mechanism,guiding function and income of the industrial investment fund,etc.,while the research on the micro level linking industrial investment fund with specific companies is relatively lacking.In view of the relative lack of micro-level research on the connection between industrial investment funds and specific companies in China at present,this paper selects Company A to introduce industrial investment funds as the research object.By combing and analyzing relevant literature and combining principal-agent theory and information asymmetry theory,this paper elaborates the environment and motivation of A Company’s introduction of industrial investment fund,and explores what economic consequences industrial investment fund will have on the whole company through influencing the governance activities of the company’s board of directors.The research findings are as follows: firstly,the introduction of industrial investment fund by Company A alleviates the principal-agent conflict.Specifically,it optimizes the ownership structure of the company and further improves the governance system of the company’s board of directors.The improvement of the governance of the company’s board of directors significantly reduces the principal-agent cost and improves the efficiency of the agency.Secondly,by injecting capital,industrial fund improves the solvency of the company,reduces the financial risk of the company,promotes the growth of the company’s performance and increases earnings per share.Finally,the capital market has a positive effect on the short-term market reaction to the company’s introduction of industrial funds.This study further enriches the research on the effect of industrial funds on corporate governance in China.Systematic research on industrial fund and its economic consequences is helpful to expand the research field of corporate finance theory,and also provides important reference significance for companies to introduce industrial fund better.