Debt Contract Conflicts :Overinvestment or Underinvestment——Evidence from the Listed Companies of Chinese Manufacturing Industry
LEI Xin-tu1,2
1.Mobile Station for Post-doctors in Business Admimistration, Nanjing University, Nanjing 210093, China; 2.School of Economics and Management, Zhejiang Agriculture and Forestry University, Hangzhou 311300, China
Abstract Overinvestment and underinvestment are the two common types of financial conflicts between enterprise creditors and stockholders. The author took the listed companies in Chinese manufacturing industry from 2004 to 2006 as samples and made an empirical research. The research shows that the financial conflicts between enterprise creditors and stockholders have the general traits and their specific characteristics. The general traits lie in that the types of creditor's right conflict are related to the risk level of enterprise' investment projects. The specific characteristics are shown in that the types of conflicts are related to the nature of enterprise ownership. Compared with state-controlled listed companies, private listed companies have the creditor's right conflict of underinvestment; the creditor's right conflict of overinvestment exists in the long-term debt of state-controlled listed companies compared with private listed companies.
LEI Xin-Tu. Debt Contract Conflicts :Overinvestment or Underinvestment——Evidence from the Listed Companies of Chinese Manufacturing Industry. Economic Survey, 2011, 28(5): 0123.
2011, Vol. 28 
