- مبلغ: ۸۶,۰۰۰ تومان
- مبلغ: ۹۱,۰۰۰ تومان
In this paper we examine the relation between ownership structure and overinvestment decisions by Chinese state owned enterprises (SOEs). We hypothesize that state owners, the largest block holders, are more committed to pursue their own sociopolitical agenda than maximizing wealth of its shareholders and show that the relation between state ownership and overinvestment is positive. We also hypothesize that managerial owners, who too receive non-negotiable shares, would discourage overinvestment lest it should inhibit the firm’s ability to pay dividends. Consistent with this hypothesis, we find a negative relation between management ownership and overinvestment. Conversely, our results show that the state ownership has a negative impact while managerial ownership has a positive effect on underinvestment decisions.
Overinvestment occurs when the management of a firm invests its free cash flows in negative NPV projects to maximize its personal benefits (“empire building”) instead of paying dividends or repurchasing stocks. The higher the level of free cash flows at the disposal of the managers, the greater is their incentive to over invest, and therefore, the larger is the firm’s value destruction (Jensen, 1986). Consistent with this expectation, Titman et al. (2004, 2010) find that the negative association between capital investments and future stock returns is stronger in firms with higher free cash flow and lower leverage.1 They interpret the evidence as investors’ under-reaction to the over investment behavior by managers who have incentives to put the best spin on the firm’s investment opportunities as well as on its overall business prospects when making high capital investments. If investors fail to recognize the over investment behavior, or are fooled by the rosy picture painted by managers, the subsequent-period stock returns of firms that make excessive investments may deteriorate with lower than expected performance resulting from overinvestment.
5. Summary and conclusions
Empirical evidence suggests that overinvestment results from the agency cost of free cash flow and leads to a firm’s value destruction. The evidence also indicates that a better corporate governance system reduces overinvestment and, thereby, protects the firm value. Two of the ways to align the managers’ interest with the shareholders’ interest are managerial ownership and concentrated ownerships (block holdings). The higher managerial ownership (with some limitations) aligns the interest of the managers with that of shareholders, while block ownerships (in particular, the institutional shareholdings) lead to better monitoring of managerial actions.
5. خلاصه و نتیجه گیری
شواهد تجربی نشان می دهد که سرمایه گذاری بیش از حد ناشی از هزینه نمایندگی جریان نقدی آزاد بوده و منجر به کاهش ارزش شرکت می شود. شواهد نیز تایید می کنند که یک سیستم حاکمیت شرکتی بهتر باعث کاهش سرمایه گذاری بیش از حد شده و بدین ترتیب از ارزش شرکت محافظت می کند. دو روش همسویی منافع مدیران با منافع سهامداران عبارتند از مالکیت مدیریتی و مالکیت متمرکز (سهامداری عمده). مالکیت مدیریتی بالاتر باشد (با برخی محدودیت ها) منافع مدیران را با سهامداران همسو نموده در حالی که مالکیت عمده (به ویژه سهامداران سازمانی) منجر به نظارت بهتر بر اقدامات مدیریتی می گردد.