Strategy Committee and Overinvestment Behavior of Listed Companies

In this paper,we attempt to introduce the approach of super efficiency DEA(data envelopment analysis) to measure the overinvestment level of listed companies,and empirically test the effect of the set-up of strategy committee and its other characteristics on the overinvestment level of those listed companies based on China's listed companies of manufacturing industry from 2006 to 2008.The results show that there are substantial overinvestment behavior in the sample companies and the companies with strategy committee have significantly higher overinvestment level.The scale,independent directors rate,average tenure,combination of board chairman and leader of strategy committee have significant positive effect on overinvestment level,but average education level and average age have significant negative effect The set-up of strategy committee is not an endogenous variable,and for the sample companies,the main reason to set up strategy committee is to cater for the requirement of regulation sector.