Pooling wisdom: The impact of investors' private information transmission on corporate investment efficiency

We investigate the impact and mechanism of industrial policy on corporate investment and investment efficiency. Using the micro-level data of A-share listed firms on China’s stock market from 2001–2020, we examine whether industrial policies have different effects on China’s state-owned enterprises (SOEs) and non-state-owned enterprises (non-SOEs). Moreover, we identify specific policy followers to further illustrate the impact of industrial policy on investment efficiency. The empirical results show that industrial policies promote investments among non-SOEs at the cost of reducing their investment efficiency, but have no effect on the investment and efficiency of SOEs. Government subsidy and inter-industry competition are the main mechanisms for the negative impact of industrial policy on investment efficiency. Moreover, target industrial policies reduce the investment efficiency of both SOE and non-SOE policy followers. Therefore, to achieve the goal of improving corporate investment efficiency and promoting sustainable economic development, policy-makers should pay more attention to the consequence of unnecessary government subsidy and excessive inter-industry competition.

This study aims to determine the effect of the effectiveness of the board of commissioners, audit committee, and institutional ownership on the efficiency of corporate investment . In addition to that, it aims to determine the moderation effect of institutional ownership toward the relationship between the effectiveness of the board of commissioners and audit committee with the efficiency of the company's investment. The effectiveness of the board of commissioners and audit committee is measured based on the independency, activity, size, and competence. By using logistic regression with 282 samples from Indonesia Stock Exchange in 2014, the results of this study provide empirical evidence that the effectiveness of the board of commissioners and institutional ownership has no effect on the efficiency of corporate investment, while the effectiveness of audit committees ha s a positive influence in the efficiency of corporate investment. Furthermore, institutional ownership can not strengthen the relationship between the effectiveness of the board's effectiveness and the effectiveness of the audit committee with the efficiency of the corporate investment. This study contributes to the literature, in which the previous literature has not linked investment efficiency with specific governance mechanisms that relats to effectiveness of the board of commissioners and audit committees. Furthermore , this study contributes to the examination of moderating role of institutional ownership. This study implies that with regard to investment decisions, the audit committee has a significant role in assisting the board of commissioners in carrying out its monitoring functions.

The purpose of this paper is to examine the relationship between regional financial development and corporate investment efficiency as well as the relationship between firm-level characteristics and corporate investment efficiency. Using a large sample of A-listed companies in China from CSMAR database between 2003 and 2016, this paper explores corporate investment efficiency and its influencing factors in emerging market on the basis of heterogeneous stochastic frontier model. The results show that: (1) the average investment efficiency of Chinese listed companies is 74.5%, and the investment efficiency of large enterprises, state-owned enterprises and enterprises with relatively high financial development level is significantly higher; (2) compared with average corporate investment efficiency in the year 2003, the investment efficiency of different types of enterprises in 2016 is significantly higher, and the gap is gradually widening; (3) enterprise heterogeneity namely firm size, nature of property right, and institutional environment reflected by the level of regional financial development indirectly affects corporate investment efficiency by influencing the financing constraints and uncertainty. The findings suggest that to improve corporate investment efficiency in emerging market, financial market should be accelerated, regional balance should be restored and the differences among regions, industries and differences between public and private sectors should be eliminated.

PurposeThis study examines the impact of the national innovation system (NIS) on corporate investment efficiency in Vietnam, an emerging socialist country where innovation is central to the national development plan.Design/methodology/approachThe study employs a sample of Vietnamese listed firms on the Ho Chi Minh Stock Exchange and Hanoi Stock Exchange from 2012 to 2022. The research models are estimated by fixed-effect estimators, while two-stage least-squares with instrumental variables and entropy balancing methods are used to address the endogeneity issues in the research design.FindingsWe find that firms’ investment efficiency increases with the advancement of the NIS, and this impact is attributed to the input measures of national innovation. This finding is robust to different model specifications and endogeneity tests. Additional analysis shows that the private sector improves investment efficiency to a greater extent than state-owned firms.Research limitations/implicationsThe findings from this research imply a successful approach to corporate development executed by the government and encourage the continuation of the current plan with strategic modifications to further promote Vietnamese firms’ corporate investment efficiency and nurture the growth of the private sector, the engine of the Vietnam economy.Originality/valueThis is the first study to examine the impact of the NIS on corporate investment efficiency, particularly in Vietnam. Secondly, this study delves into a unique structure of the Vietnamese economy through the state ownership lens and points out the heterogeneous impact of NIS on investment efficiency between firms in the private and public sectors.

Purpose This paper aims to investigate the influence of over-allocation and under-allocation of family board seats on the corporate investment efficiency. Design/methodology/approach Based on the perspective of altruistic behavior, this paper theoretically analyzes the relationship between the preference of family board seats allocation and corporate investment efficiency, and designs the research. On this basis, we use STATA14.0 as an analysis tool to empirically test the relationship between the preference of family family board seats allocation and corporate investment efficiency, and consider the impact of different governance scenarios. Findings This study finds that firms with a higher over-allocation degree of family board seats invest more efficiently, evidenced by significantly suppressed over-investment rather than mitigated under-investment. However, we do not find evidence that the higher degree of under-allocation of family board seats contribute to lower corporate investment efficiency. Additionally, this study finds that the positive relationship between the over-allocation degree of family board seats and corporate investment efficiency is more pronounced for firms with higher separation of cash flow rights and control rights, and weaker regional law system environment. Our mechanism discussion shows that the higher over-allocation level of family board seats contributes to the mitigation of agency costs for family firms by reducing the tendency for non-family boards to vote “against board proposals” and the appropriation behavior of the controlling family, and eventually improving corporate investment efficiency. Originality/value This paper examines the relationship between the preference of family board seats allocation and corporate investment efficiency from the perspective of altruistic behavior. Unlike previous studies, this paper distinguishes the governance effects arising from over-allocation and under-allocation of family board seats. Additionally, different governance scenarios are incorporated into the decision-making mechanism of the board of family firms, and the influences of the divergence of cash-flow and control rights and a weaker regional law system on the governance effect of the preference of family board seat allocation are analyzed.

In the context of China's economic transformation and rapid technological advancement, based on the implementation of the "Pilot Policy for Promoting the Integration of Technology and Finance", this paper constructs a panel data of prefecture-level cities in China from 2005 to 2017, and examines the impact and mechanism of science and technology financel policy on the corporate Investment efficiency by using the DID method. The DID method is used to investigate the impact and mechanism of technology financel policy on the corporate Investment efficiency. It is found that the science and technology financel policy significantly improves the corporate Investment efficiency, and this conclusion remains valid after a series of robustness tests such as the parallel trend test, the placebo test, and the Propensity Score Matching-Difference in Differences (PSM-DID) analyses. Further mechanism analysis in this paper reveals that the science and technology finance policy mainly enhances the corporate Investment efficiency by alleviating the corporate financing constraints, promoting the digital transformation of enterprises, and increasing the capitalized R&D investment of enterprises. In addition, the effect of the implementation of science and technology finance policy has a certain degree of heterogeneity, and this policy has a more significant impact on the improvement of investment efficiency of non-state-owned enterprises and large enterprises. This paper delves into the impact of technology finance on the investment behavior of micro-enterprises, providing theoretical support and empirical guidance for the advancement of science and technology finance practices and high-quality economic development.

This study aims to analyze the effect of Quality of Financial Reporting and Tax Incentives on Corporate Investment Efficiency with Good Corporate Governance as a Moderating Variable. The sampling method that used was purposive sampling method. The independent variables are Quality of Financial Reporting and Tax Incentives. Then the dependent variable is Corporate Investment Efficiency. The moderating variable is Good Corporate Governance. The population in this study are manufacturing companies which are listed on the Indonesian Stock Exchange as long as in 2013-2017. The results of the study showed that the Quality of Financial Reporting and Tax Incentives did not effect the Corporate Investment Efficiency. Good Corporate Governance has a negative effect on Corporate Investment Efficiency. Good Corporate Governance is able to strengthen the influence of Quality of Financial Reporting on Corporate Investment Efficiency. Furthermore, Good Corporate Governance is not able to strengthen the Influence of Tax Incentives on Corporate Investment Efficiency.

Foreign bank entry will not only alleviate corporate financing constraints, but also reduce the agent conflicts.Then how does foreign bank entry affect corporate investment efficiency? Based on the data of Shanghai and Shenzhen A-share listed companies in China from 2005 to 2015, this paper finds that foreign bank entry can significantly increase corporate investment efficiency, and this effect is more significant in large corporations, showing the obvious cherry-picking effect.Compared with state-owned enterprises, the effect of foreign bank entry on corporate investment efficiency is more significant in private companies, especially large private companies.Further study finds that, foreign bank entry overall improves corporate investment efficiency through the mitigation of financing constraints and the inhibition of agent conflicts, and the role in mitigating financing constraints is more significant.In addition, in private companies, foreign bank entry improves corporate investment efficiency mainly through the mitigation of financing constraints; in state-owned enterprises, foreign bank entry improves corporate investment efficiency mainly through the inhibition of agent conflicts.This paper not only supplements the relevant researches of factors affecting corporate investment efficiency, but also sheds light on how to guide foreign bank entry better and play its positive role better.

This paper studies the impact of economic policy uncertainty on corporate investment efficiency. The study finds that economic policy uncertainty has a significantly positive impact on corporate investment efficiency. In addition, the positive relationship is still robust after conducting a series of robustness checks. Further analyses show that the impact of economic policy uncertainty on corporate investment efficiency is more pronounced in firms that do not employ Big 4 auditors, are non-state-owned, and have fewer analysts. By exploring the economic channel, this study shows that economic policy uncertainty is related to higher information disclosure quality. Firms with higher information disclosure quality tend to improve their corporate investment efficiency when economic policy uncertainty increases. Findings show that the increase in economic policy uncertainty in China's capital market can improve corporate information disclosure quality and further improve corporate investment efficiency.

Can blockchain technology be effectively integrated into the real economy? Evidence from corporate investment efficiency

PurposeThe paper investigates the effect of corruption on corporate investment efficiency around the world.Design/methodology/approachThe sample includes 218,350 observations from 30,074 firms across 42 countries. The authors measure corruption based on the Corruption Perception Index (CPI) from Transparency International, Corruption Control Index (CCI) from the World Bank and Corruption Index from the International Country Risk Guide.FindingsThe authors find that corruption is negatively related to investment efficiency. The robustness checks with different measures of corporate investment and alternative regression approaches show consistent findings. Moreover, the authors also find that the effect of corruption is stronger (weaker) in strong (weak) shareholder protection countries.Originality/valueThe paper has two important contributions to the literature. First, it shows that corruption environment is also a determinant of corporate investment efficiency. Second, legal protection of shareholders can mitigate the negative effect of corruption on corporate investment efficiency.

This study examined private information transmissions on CGM/UGM websites from the perspective of the Japanese sense of information privacy. The characteristics of Japanese private information transmission on the CGM are described and discussed.

In this paper, an alternative method is proposed instead of the ones using semi-definite programming (SDP) tools in precoder and decoder design to solve max-min fairness (MMF) problem in the multiuser downlink multi-input-multi-output (MIMO) communication systems for common and private information transmission. This is a Hybrid method which is the combination of the two solving total signal-interference plus noise ratio (SINR) maximization (Total-SINR Max) and total MMSE (Joint-TMSE) problems and it is very advantageous than algorithms using SDP. The performance of Hybrid method in terms of the average bit error ratio (BER) and computation time is given in the simulation results.

PurposeThis paper aims to examine whether CEOs with an engineering background increase corporate investment efficiency (CIE). The authors further investigate the role of engineering directors on boards of the above association.Design/methodology/approachDrawing from upper-echelon theory, which suggests that corporate outcomes are a reflection of its top management characteristics, the authors hypothesise a positive association between engineer CEOs and CIE and a positive moderation role of the proportion of engineer directors on boards in the above association. The authors examine this link using a sample of Australian Securities Exchange 200 firms from 2015 to 2022. Engineer CEO data is hand-collected from corporate annual report biographies and investment efficiency is a measure that captures whether the investments are maintained at optimal levels relative to industry-year benchmarks, following the approaches of Biddle et al. (2009), Chen et al. (2011) and the average values of both models.FindingsThe results indicate support for the hypotheses, revealing that firms managed by engineer CEOs have higher investment efficiency than their counterpart firms. This association is exacerbated in the presence of a higher proportion of engineer directors on boards. The results are robust to year and industry-fixed effects, propensity score matching, alternative measures of investment efficiency and robust standard errors. Our results also remain valid for an industry sub-sample using certain industries in which engineering expertise maybe more desirable (e.g. metals and mining).Research limitations/implicationsBy showing that engineer CEOs are significantly associated with CIE, the authors contribute to upper-echelon literature examining the link between CEO characteristics and corporate outcomes, particularly, investment decision efficiency. The influence of engineering background on corporate outcomes is less examined in the literature; thus, the authors contribute to this thin literature.Originality/valueThe findings are informative to potential investors in evaluating firms’ investment efficiency before investing in firms. For example, firms with engineer CEOs are likely to maintain efficient investment levels in future years.

PurposeIn this study, the authors explore the association between employee education level and the efficiency of corporate investment using data from a sample of Chinese listed firms during the period from 2011 to 2018. By examining the impact of education on investment efficiency, the authors' study provides valuable insights that contribute to a deeper understanding of the underlying economic mechanisms related to education.Design/methodology/approachThe authors conduct multivariate regression analyses to examine the relationship between investment efficiency (following Richardson, 2006) and the level of employee education, along with a series of control variables. To ensure the reliability of the authors' findings, the authors subject the their results to a comprehensive set of robustness tests, such as a staggered difference-in-difference (DiD) regression approach, an instrumental variable (IV) method and the use of alternative employee education level and investment efficiency measurements.FindingsThe findings offer compelling evidence that higher levels of education have a positive impact on firms' investment efficiency, and this effect remains robust across various model specifications and endogeneity considerations. Moreover, the influence of education is more pronounced in firms that prioritize employee training, maintain effective internal communication and offer attractive financial rewards. Furthermore, the results suggest that the relationship between education and investment efficiency is influenced by the firms' business nature and competitive environment. Factors such as business complexity, labor intensity and business location also play a role in shaping the impact of education on investment outcomes.Originality/valueThe study emphasizes the crucial role of education in influencing investment decisions and performance within firms. By delving into this previously unexplored area, the authors' research contributes to the existing literature, establishing that the level of employee education is a significant determinant of corporate investment efficiency. This valuable insight has substantial implications for firms aiming to enhance their investment decision-making processes and overall performance. Understanding the positive impact of education on investment efficiency can empower organizations to leverage their human capital effectively and achieve better investment outcomes, ultimately contributing to long-term success and competitiveness in the market.