The Empirical Research of Impact of Information Asymmetry on Overinvestment
|Keywords||Principal-Agency Information Asymmetry Information Transparency Overinvestment|
Investment is allocation activities of capital in a company. The efficiency of investment, which directly relates to interests of shareholders and creditors and the ability to maximize the value of companies, affects the ability of companies to achieve sustainable development in the market filled with fierce competition. Therefore, investment has always been a hot issue in the study. Our capital market is an emerging market full of many imperfections, which will affect the investment and its efficiency. The inefficient capital allocation of listed companies in our country has been rise from universal inefficient investment which considers overinvestment as an important factor. Therefore, how to effectively harness overinvestment to enhance efficiency in allocating funds has become a serious problem.This article will analyze the influence of corporate information transparency to overinvestment: Firstly, the paper will study how information transparency to impact overinvestment under correlating theories, which will use reasons and forms of overinvestment to be the starting-point; Then, this paper will use the data of listed companies from 2003 to 2007 to prove the information transparency can control overinvestment. The empirical results show that increasing the information transparency can help to reduce overinvestment; Finally, this paper will put forward to suggestions as perfecting the system of information disclosure and improving effective supervision and speeding the development of bond market based on analysis of theoretical and empirical results to control overinvestment of listed companies to improve the efficiency of investment.