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Research on the Impact of Management Stock Ownership of Listed Companies on Investment Efficiency

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DOI: 10.23977/ferm.2024.070107 | Downloads: 19 | Views: 231

Author(s)

Xuan Li 1, Jingyi Liu 1

Affiliation(s)

1 School of Economics, Hubei Business College, Wuhan, Hubei, 430079, China

Corresponding Author

Jingyi Liu

ABSTRACT

The effectiveness of investment behavior is directly related to the operation and development of enterprises, and affects the realization of the goal of maximizing enterprise profits. In reality, the investment decisions of many companies often go against the maximization of value, which makes the actual investment expenditure deviate from the optimal investment scale to varying degrees, resulting in insufficient investment or excessive investment and other low-efficiency investment behaviors. These low-efficiency investment behaviors are largely caused by the agency costs generated by entrusted agency. The management shareholding system is considered to be effective in reducing the agency costs between shareholders and managers and mitigating agency conflicts. This paper starts from the perspective of management shareholding, divides the investment efficiency problem into insufficient investment and excessive investment, selects the data of Shanghai and Shenzhen A-shares, establishes a multiple linear regression model, takes whether the management holds shares and the proportion of management holding shares as explanatory variables, introduces the asset-liability ratio, company size, whether the two positions are held concurrently and the largest shareholder holding shares as control variables, and empirically studies the impact of management shareholding on investment efficiency of listed companies in China, finally puts forward targeted policies and suggestions.

KEYWORDS

Management Shareholding, Underinvestment, Overinvestment

CITE THIS PAPER

Xuan Li, Jingyi Liu, Research on the Impact of Management Stock Ownership of Listed Companies on Investment Efficiency. Financial Engineering and Risk Management (2024) Vol. 7: 40-50. DOI: http://dx.doi.org/10.23977/ferm.2024.070107.

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