International Journal of Social Science & Economic Research
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Title:
THE INFLUENCE OF THE NETWORK POSITION OF THE BOARD OF DIRECTORS ON THE INSUFFICIENT INVESTMENT OF ENTERPRISES

Authors:
Qiu Dongfang , Lu Chunyu

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Qiu Dongfang1 , Lu Chunyu2
1,2. College of Economics and Management, Nanjing University of aeronautics and astronautics, Nanjing, China

MLA 8
Dongfang, Qiu, and Lu Chunyu. "THE INFLUENCE OF THE NETWORK POSITION OF THE BOARD OF DIRECTORS ON THE INSUFFICIENT INVESTMENT OF ENTERPRISES." Int. j. of Social Science and Economic Research, vol. 4, no. 2, Feb. 2019, pp. 1169-1199, ijsser.org/more2019.php?id=88. Accessed Feb. 2019.
APA
Dongfang, Q., & Chunyu, L. (2019, February). THE INFLUENCE OF THE NETWORK POSITION OF THE BOARD OF DIRECTORS ON THE INSUFFICIENT INVESTMENT OF ENTERPRISES. Int. j. of Social Science and Economic Research, 4(2), 1169-1199. Retrieved from ijsser.org/more2019.php?id=88
Chicago
Dongfang, Qiu, and Lu Chunyu. "THE INFLUENCE OF THE NETWORK POSITION OF THE BOARD OF DIRECTORS ON THE INSUFFICIENT INVESTMENT OF ENTERPRISES." Int. j. of Social Science and Economic Research 4, no. 2 (February 2019), 1169-1199. Accessed February, 2019. ijsser.org/more2019.php?id=88.

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Abstract:
As one of the core contents of modern enterprise financial management, investment activity plays an important role in economic growth and scientific and technological progress, and is also an important research object in the field of accounting research. In practice, investment often faces the problem of non-efficiency investment. Non-efficiency investment is mainly realized as insufficient investment in China. In recent years, academic circles have begun to use the emerging social network theory to analyze the lack of investment, and found that the social network relationship behind the board has had a major impact on the lack of investment in enterprises. Social network theory believes that social capital is a resource embedded in the social network relationship. Individual behavior is embedded in the social network and will be affected by non-economic factors from the network. The position of the individual in the network determines the individual's ability to get resources. Studies have shown that the phenomenon of chain director between boards of directors of listed companies is very common. Based on this, this paper studies the impact of the board of directors formed by chain directors on the lack of investment in enterprises from the perspective of social networks.
This paper takes the 2015-2017 Shanghai and Shenzhen A-share main board listed companies as a sample to explore the impact of the board's network location on under-investment. The improved Richardson model was used to measure the lack of investment, and the differences in the influence of the network position of the board of directors on the under-investment of enterprises under different ownership forms were further explored. This paper selects the network center degree and structural hole limit index of the board of directors to measure the network characteristics of the board of directors, and builds a multivariate regression model by using social network theory and structural hole theory as the theoretical basis. Through descriptive statistics, correlation analysis, and regression analysis, it is found that: (1) The higher the centrality of the board's network location, the more beneficial it is to alleviate the lack of investment; the closer the board structure hole is to the center, the lower the degree of underinvestment; (2) Compared with state-owned enterprises, the network position of private listed companies' board of directors has a better governance effect on under-investment.