The DOI matches its Crossref record; 45 of the 45 references it cites were found in a registry or an index.
Government intervention and investment efficiency: Evidence from China
Open accessAbstract
The extant corporate investment literature has documented that information asymmetry and agency conflicts between managers and outside investors prevent firms from making optimal investment decisions. In this study, we investigate whether government intervention, as another form of friction, distorts firms' investment behavior and leads to investment inefficiency. Using Chinese data, we test this by measuring government intervention at two different levels. First, we compare investment efficiency between SOEs and non-SOEs. We find that the sensitivity of investment expenditure to investment opportunities is significantly weaker for SOEs. Second, we measure government intervention by whether a firm is politically connected through the employment of top executives with a government background. We find that political connections significantly reduce investment efficiency in SOEs. However, we do not find such evidence in non-SOEs. Taken together, our findings suggest that government intervention in SOEs through majority state ownership or the appointment of connected managers distorts investment behavior and harms investment efficiency.
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Cites
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The role of board gender and foreign ownership in the CSR performance of Chinese listed firms
McGuinness, P. B., Vieito, J. P., & Wang, M. (2017) · Journal of Corporate Finance · doi:10.1016/j.jcorpfin.2016.11.001 · Cited by 939
Economic policy uncertainty and corporate investment: Evidence from China
Wang, Y., Chen, C. R., & Huang, Y. S. (2014) · Pacific-Basin Finance Journal · doi:10.1016/j.pacfin.2013.12.008 · Cited by 708
Political uncertainty and corporate investment: Evidence from China
An, H., Chen, Y., Luo, D., & Zhang, T. (2016) · Journal of Corporate Finance · doi:10.1016/j.jcorpfin.2015.11.003 · Cited by 498
Yang, D., Wang, A. X., Zhou, K. Z., & Jiang, W. (2019) · Journal of Business Ethics · doi:10.1007/s10551-018-3830-5 · Cited by 355
Cui, L., Meyer, K. E., & Hu, H. W. (2014) · Journal of World Business · doi:10.1016/j.jwb.2013.12.003 · Cited by 332
Metadata
- Authors
- Chen, S., Sun, Z., Tang, S., & Wu, D.
- Venue
- Journal of Corporate Finance
- Publisher
- Elsevier BV
- Published
- 2011-04
- Volume
- 17
- Issue
- 2
- Pages
- 259-271
- ISSN
- 0929-1199 (ISSN-L)
- OpenAlex
- W2099737377
- Cited by
- 1,288
- References
- 45
- FWCI
- 39.39
- Type
- journal article
- Language
- en
- Open access
- green
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
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