Major Shareholders' Shareholding Ratio on Corporate Investment Efficiency

Abstract

Investment efficiency, a key indicator of core competitiveness, directly impacts a company's long-term value and risk resilience. The largest shareholder's shareholding ratio, due to its profound influence on corporate control, decision-making mechanisms, and agency problems, has become a key internal factor shaping a company's investment decisions. This paper uses a sample of Chinese A-share listed pharmaceutical and biological companies from 2020 to 2024 as a research sample. Using multiple regression analysis and the absolute value of the residuals from the Richardson model to measure investment efficiency, this paper empirically examines the impact of the largest shareholder's shareholding ratio on corporate investment efficiency. The results show that among listed companies in the pharmaceutical and biological industry, there is no significant linear relationship between the largest shareholder's shareholding ratio and corporate investment efficiency. This result may be due to factors such as the combined offsetting effects of the two opposing mechanisms of "interest synergy" and "tunneling effect" brought about by concentrated ownership. This study provides a foundation for further theoretical research and the refinement of empirical methods and has practical implications for optimizing corporate governance structures and improving resource allocation efficiency.