Study On The Influence Of Non-Controlling Major Shareholders Exit Threat On Inefficient Investment Of Listed Companies

With the establishment of the shareholding reform and the financing and securities system,the liquidity of stocks in China capital market has gradually increased which facilitates shareholders of listed companies to increase and decrease their holdings and makes exit threats credible.In recent years,scholars have shown that,in addition to "actively speaking out" and "voting with their feet",non-controlling major shareholders can also reduce information asymmetry by exit threats.The research has shown that non-controlling major shareholders can reduce information asymmetry through exit threats to achieve corporate governance.Since the interests of controlling shareholders are closely related to the company’s stock price,when non-controlling major shareholder leaves the company,this behavior will send unfavorable signals to the market and investors,which will cause the market and investors to react to this,thus leading to a decrease in the stock price and losses of controlling shareholders.Therefore,the non-controlling major shareholder can mitigate the agency problem of the company through the exit threat to achieve the purpose of corporate governance and thus further enhance the investment efficiency.As investment activities are the most important activities of enterprise development,how exit threat affect the inefficiency investment is a topic worthy of discussion.Based on principal-agent theory,this paper explores the governance effect of exit threat on inefficient investment from the perspective of non-controlling major shareholders.This paper compares the relevant literature,puts forward the corresponding hypotheses through theoretical derivation,takes the A-share listed companies in China from 2007 to 2019 as samples,determines the measurement of relevant variables and research models,conducts descriptive statistics and correlation analysis to portray data characteristics and correlations,respectively,and uses linear regression analysis to test the hypotheses,and the reliability of the results is tested by endogeneity test and robustness.The empirical analysis in this paper focuses on the relationship between exit threat and inefficient investment by non-controlling major shareholders,the impact of controlling shareholder heterogeneity and the moderating role of information disclosure quality.In addition,this paper broadens the findings in further tests by subdividing inefficient investment into two categories based on previous studies,re-instantiating the previous hypotheses and attempting to examine the types of inefficient investment that can be improved by the aforementioned influencing factors.The findings of this paper are as follows:(1)the exit threat of non-controlling major shareholders can significantly mitigate the level of inefficient investment;(2)the negative effect of the exit threat of non-controlling major shareholders on inefficient investment is more significant in the group without equity pledge compared to the group with equity pledge;(3)the negative effect of the exit threat of non-controlling major shareholders on inefficient investment compared to the group with low controlling shareholder wealth concentration is more significant in the group with high controlling shareholder wealth concentration group;(4)the quality of information disclosure significantly enhances the negative effect of exit threat of non-controlling major shareholders on inefficient investment;(5)the exit threat of non-controlling major shareholders significantly alleviates the underinvestment problem,and the inhibitory effect of exit threat of non-controlling major shareholders on underinvestment relative to overinvestment in the absence of equity pledges and high controlling shareholder wealth concentration stronger.Finally,the article summarizes the findings of the study and relies on the gradual liberalization of China capital market to offer valuable suggestions to investors,firms and regulators in terms of the establishment of corresponding governance and monitoring mechanisms and the enactment of policies.