Corporate Life-Cycle, Corporate Governance and Investment Efficiency

摘要

Most of literature related to corporate governance and corporate investment efficiency has been studied from static perspective. This paper conducted a research exploring the dynamic evolution of corporate governance mechanisms to design an index of corporate lifecycle. The result suggests that the impact that corporate governance mechanisms have on investment efficiency is various at different stages of lifecycle. Management equity incentive can significantly improve the efficiency of investment at the stage of growth, while monetary incentive plays a more important role for improving the investment efficiency at the stage of maturity. For firms at the stage of growth, check-and-balance ownership structure can reduce corporate investment efficiency while, at the stage of maturity, check-and-balance ownership structure can help to improve the corporate investment efficiency but not significant statistically. The governance of board can improve the corporate investment efficiency at the stage of maturity. The conclusion of this paper provides a reference for firms to adjust the corporate governance mechanisms dynamically at different stages of lifecycle.