Investment Efficiency Research Articles

Does banking competition increase corporate labor income share? Evidence from China

This paper investigates the impact of banking competition on corporate labor income share in China. Utilizing hand-collected unique data on bank branches within a certain distance of firms and a large sample of Chinese A-share list firms spanning the period 2000–2022, we find that banking competition significantly boosts corporate labor income share. A 10 percent increase in banking competition, the corporate labor income share increases by 0.06 percent on average. The results remain robust after replacing proxies, changing estimation methods, controlling for other shocks, and addressing endogenous concerns. Easing financing constraints, improving investment efficiency, and enhancing human capital are three essential channels through which banking competition promotes corporate labor income share. We also find that the impact of banking competition on corporate labor income share is more pronounced for firms with higher external financing dependence, higher financing gaps, more investment opportunities, higher governance efficiency, and higher information asymmetry. Our findings highlight the significance of enhancing banking competition to promote income distribution, foster common prosperity, and drive high-quality economic development.

Portfolio Optimization Strategies: New Approaches Based on Machine Learning Forecasting

This study provides an in-depth discussion and comprehensive review of the latest applications of machine learning techniques in the field of portfolio optimization. The article begins with an overview of traditional portfolio optimization theory and its limitations, and then focuses on how machine learning predictive models, which have flourished in recent years, can provide new perspectives and tools for solving the problems of non-linearity, dynamics and uncertainty in investment decision-making. This paper provides a detailed overview of the application practices of various machine learning algorithms (e.g., deep learning, reinforcement learning, integrated learning, etc.) in the areas of asset return prediction, risk assessment, and optimal weight allocation, and analyses their advantages and challenges compared to traditional methods. The analysis of relevant research cases reveals the significant effect of machine learning predictions in increasing expected portfolio returns, reducing risk exposure, and achieving effective diversification. The study also explores possible future trends and potential research directions for machine learning in portfolio optimization, highlighting the importance of combining domain knowledge with big data-driven intelligent investment decisions. This review aims to provide financial scholars and practitioners with a new way of thinking about portfolio optimization, and to promote the combination of theoretical research and practical operation in the fields of financial engineering and investment management, so as to achieve more accurate and efficient investment decisions.

Do Bill Shocks Induce Energy Efficiency Investments?

Do Bill Shocks Induce Energy Efficiency Investments?

Tax-avoidance Effect on Investment Inefficiency: An Examination of Agency Theory

Tax-avoidance activity in firms potentially increases investment inefficiency, arguably due to agency problems in firms. Further, this relationship shows country-wide variation. Using the data of 336 Indian firms from 2011 to 2021, this article examines the tax avoidance and investment efficiency relationship in the Indian context. It also provides empirical evidence for the agency argument on the tax avoidance-investment efficiency relationship. Estimates using the two-step system generalized methods of moments approach show that tax avoidance in Indian firms is positively associated with investment inefficiency, and the agency problem augments this relationship. The findings have significant policy implications for policymakers and firms. JEL Codes: G30, G32, G34

기업의 ESG 성과가 기업가치에 미치는 영향 : 최고경영자 특성을 중심으로

[Purpose] It analyzes how ESG management (environment, society, and governance) affects corporate value and analyzes whether these correlations differ according to the CEO’s personal characteristics to further confirm the CEO’s role in ESG activities. Through this, it is intended to present a new perspective on the characteristics of managers and provide an opportunity to increase the importance of ESG activities. [Methodology] This study collected data from 2,469 companies listed on the Korea Exchange from 2020 to 2022. The data included ESG activity metrics, demographic characteristics of managers, overconfidence, and capabilities. Using multiple regression analysis, the relationship between managerial characteristics and ESG activities was examined. [Findings] The results indicate that managers with higher levels of overconfidence tend to participate more actively in ESG activities. Additionally, the higher the managerial capability, the more vigorous the ESG activities, which positively influenced corporate value. [Implications] This study suggests that companies can actively introduce and effectively perform ESG management to improve corporate value. In particular, managers with excellent abilities can actively implement ESG management to improve the corporate image, improve the company’s sustainable management, and maintain the company’s long －term competitive advantage. It can help companies and investors recognize this fact. In the future, more efficient ESG management and investment strategies will be established in consideration of the characteristics of the CEO in the management and investment process.

Impact of Internal Control and Audit Quality on Corporate Investment Efficiency - Focus on Chinese Listed Companies

Impact of Internal Control and Audit Quality on Corporate Investment Efficiency - Focus on Chinese Listed Companies

Financial management, efficiency, and care quality: A systematic review in the context of Health 4.0.

This article investigates the intersection between innovation, Health 4.0, and financial management in the healthcare industry, emphasizing the importance of operational efficiency and quality of care. The study aims to analyze how financial management processes in healthcare relate to Health 4.0 and enhance care quality. It begins with a thorough theoretical grounding, proposing a framework that connects Health 4.0 with financial management practices. A systematic review of the literature was conducted, identifying trends, challenges, and opportunities in the financial management of Health 4.0. The results highlight selected articles on responsible innovation, Health 4.0 technologies, investments in health, hospital efficiency, performance forecasting, and high-cost patient management. These articles were clustered into "Data Analysis and Machine Learning in Healthcare" and "Health Management and Sustainability," providing a categorized understanding of the topics. The study reveals that Health 4.0 offers significant opportunities for process efficiency and cost reduction without compromising service quality. It highlights strategic advantages in addressing contemporary healthcare challenges by optimizing processes, improving financial projections, and incorporating advanced technologies efficiently. The successful implementation of Health 4.0 can lead to substantial improvements in service quality, adding value to patients and driving local economic development. This article offers valuable insights for healthcare professionals and managers, emphasizing the transformative potential of Health 4.0 and outlining strategies for its effective implementation. The clustering of articles provides a clearer understanding of current research in Health 4.0, contributing significantly to the field and guiding future research directions.

Debt maturity, governance and investment efficiency: new evidence from emerging market

PurposeThis study investigates the combined influence of corporate governance (CG) and debt maturity (DM) on the investment inefficiency among non-financial 506 NSE-listed firms in India between 2009 and 2022. Additionally, this study also investigates the moderating effect of short-term debt (STD) maturity concerning the relationship between CG and investment inefficiency.Design/methodology/approachUtilizing the residuals extracted from the Biddle et al. (2009) investment model, three different forms of investment inefficiency (investment inefficiency, overinvestment and underinvestment) were measured. To measure the internal governance of firms, a new corporate governance index (CGI) was developed using 65 new governance stipulations, whereas STD was measured as short-term debt divided by total debt. Interaction effects between CG and DM were also estimated. Employing CGI and STD along with firm-specific control variables, many pooled regression models were estimated. Endogeneity issues were addressed through two-stage least squares. Robustness checks were also conducted using the two-step system GMM, alternative measures of dependent and independent variables.FindingsThe findings demonstrate that higher CG and shortened DM increase investment efficiency. This evidence implies that firm-level governance and short-term debt reduce information asymmetry and increase management oversight. Additionally, the evidence suggested that shortened DM and CG complement one another to increase investment efficiency, suggesting companies that utilize STD to a greater (lesser) extent demonstrate a greater (lesser) impact of CG in reducing investment inefficiency.Practical implicationsThis work first advocates the establishment and implementation of robust corporate governance mechanisms to control agency conflicts, moral hazard, adverse selection and limit opportunistic behavior of managers for improving investment efficiency. Second, since interaction effects suggest a complementarity between CG and DM, it is advocated that STDs can be used to achieve optimal investment choices to control moral hazards and adverse selection and discourage suboptimal investment levels.Originality/valueThis work provides new evidence concerning the effects of CG and DM on various forms of corporate investment efficiency (investment inefficiency, overinvestment and underinvestment, using alternate measures) in an emerging economy like India having a unique institutional framework and macroeconomic environment using a newly developed firm-specific CG index for a large sample of companies using recent data.

Majority-of-the-minority shareholder votes and investment efficiency

In an environment where concentrated share ownership is the norm, we ask whether Majority-of-the-Minority (MoM) votes curb controlling shareholder overreach and investment inefficiency. We consider MoM votes on controller-based related party transactions in China. Such votes give minority parties potential veto power. We report strong association between shareholder disapprovals on controller-based investment related MoM proposals and the underlying entity's investment plans. This association is robust to a battery of tests, including assessment of pre-vote consultation between minority and controlling shareholders and an exogenous regulatory shock. We also report increased likelihood of informal securities enforcements in the year following MoM shareholder disapproval.

Do regional tax incentive policies improve productivity?

The difficulty in transforming old industrial areas constitutes a significant factor contributing to regional development imbalances. Can regional tax incentives, as a crucial component of regional policies, polish the "rust belt" regions? This study leverages the inaugural Value-Added Tax (VAT) reform in China as an opportunity to explore the potential of regional tax incentives in achieving sustainable development in traditional industrial areas. Drawing upon a comprehensive industrial enterprise database, we employ a Propensity Score Matching-Difference in Differences (PSM-DID) approach to examine the efficacy of these tax incentives. Our findings reveal that: (1) Regional tax incentives primarily enhance firms productivity by stimulating investment in enterprises, yet they do not contribute to improved investment efficiency or spur innovation within firms. (2) Regional tax incentives have alleviated financing constraints for enterprises in old industrial bases, significantly enhancing the Total Factor Productivity (TFP) of firms with higher financing constraints. This policy has had an even stronger impact on improving the TFP of state-owned and monopolistic enterprises. (3) Regional tax incentives have impeded productivity growth by preventing the exit of low-efficiency firms and the entry of high-efficiency ones. These incentives also increased the likelihood of "zombie firms" forming and failed to promote endogenous economic growth in the Northeast region. Additionally, they have distorted the allocation of resources towards capital and technology-intensive industries in that area. In China's old industrial bases, regional tax incentives should be coordinated with market-oriented reforms; these regional tax incentive policies should also be further enriched.

How does carbon emissions trading scheme affect the investment efficiency of companies? Evidence from China

Carbon emissions trading scheme (ETS) will change the internal and external operating environment of related companies, increase new carbon reduction costs, and may affect their investment behavior and decision-making. This study constructs the policy effect evaluation model to evaluate the net effect of China's ETS pilot policy on the investment efficiency of related companies in high-carbon industries. This study indicates that: first, China's ETS pilot policy has reduced the inefficient investment of related companies by 11.40% during the sample period. Second, innovation ability plays an enhanced moderating effect in the inhibitory effect of China's ETS pilot policy on the inefficient investment of related companies in the short term, but the effect is weakened in the long-term. Third, the policy effect is relatively obvious for non-state-owned companies and companies with more institutional shareholdings. This research has important reference value for the continuous improvement of China's national carbon market, and the steady transformation from simple investment-driven to investment-efficiency-driven economic development in China.

Supply chain network, digital transformation, and investment efficiency

ABSTRACT In the modern digital era, firms’ position in the supply chain networks significantly impacts their investment decision-making. As businesses undergo digital transformation to enhance collaboration and supply chain efficiency, a research gap exists in understanding their combined influence on investment efficiency. Using Chinese public firms from 2008 to 2021 as a sample, we construct a supply chain network and analyse how supply chain network structures affect investment efficiency. Our results show that both supply chain network centrality and structural holes enhance firms’ investment efficiency. Mechanism analysis shows that corporate digital transformation moderates this relationship by mitigating financing constraints and agency costs. In addition, further results reveal that the effect of supply chain networks is stronger for non-state-owned firms, firms in low-marketization region, and firms in closer geographic proximity to their customer base. This study contributes to understanding the roles of supply chain networks and digital transformation in firms’ investment efficiency.

Environmental, social and governance (ESG) performance as a moderator in assessing the impact of government subsidies on underinvestment in China

In recent years, underinvestment has become common among subsidised enterprises in China. Stakeholder theory asserts that environmental, social and governance (ESG) performance forces enterprises to prioritise stakeholder needs by incorporating ESG principles into business operations, which in turn influences business investment decision-making. This study examines the impact of government subsidies on firm underinvestment and whether ESG performance plays a moderating role in this direct relationship. A dataset of 17,780 firm-year observations of A-share public firms in China for the period 2011–2021 was employed, and the data were analysed using the ordinary least squares regression model, fixed-effects regression model, propensity score matching difference-in-difference model, and instrumental variable approach. These results indicate that government subsidies mitigate firm underinvestment and tend to reduce underinvestment in firms with higher ESG performance. Moreover, the findings indicate that the performance in ESG factors influences the effect of government subsidies on the lack of investment in state-owned enterprises (SOEs), as opposed to non-SOEs. This effect is more noticeable in heavily polluting industries compared to non-heavily polluting industries. These findings imply that the government should promote the ESG performance of subsidised firms to enhance their overall corporate investment efficiency.

Fostering Investment Efficiency in Indonesian Firms: Empirical Evidence and Recommendations for Future Research

Objective –The purpose of this research is to review and examine the empirical evidence on investment efficiency in Indonesia.Design/methodology –This research employs bibliographic analysis. This research utilizes 30 articles published between 2015 and 2023 in internationally recognized Scopus journals and nationally recognized Sinta 2 journals.Results –This research identifies three categories of factors that impact investment efficiency namely financial, governance, and non-financial factors. Financial factors are essential in assessing investment effectiveness, while corporate governance factors can enhance a firm's investment decisions. Non-financial factors related to managerial personnel can also significantly impact a firm's investment efficiency. Future research on investment efficiency in Indonesia should incorporate diverse variables and external factors, conduct comparative studies with neighboring countries, and collaborate with industry stakeholders to bridge the gap between theory and practice.Research limitations/implications –This research focuses primarily on analyzing the literature on investment efficiency in Indonesia by using charting the field method. This research adds to the literature on the various factors that affect the investment efficiency of firms.Novelty/Originality –This research is the first to conduct a comprehensive literature review on investment efficiency in Indonesia. By systematically analyzing findings from various studies, this research offers a unique and thorough understanding of investment efficiency within the Indonesian context.

State management of public investment in road construction in Vietnam: Current situation and solutions

This study examines Vietnam’s state management of public investment in road construction. The development of road transport infrastructure is in extremely high demand as Vietnam undergoes an economic transition. Despite the fact that the effects of the COVID-19 pandemic have caused the economy to grow more slowly recently, public investment in the transport industry has increased significantly. Several modern, large-scale road works that have been finished and put into operation are having a significant positive impact on urbanization, connecting regions, and socioeconomic development. However, public investment in road transport construction still has a lot of issues that need to be fixed. The state’s weakness is one of the primary issues that reduces investment efficiency. This study analyzes the state management of public investment in road construction, according to the following contents: legal system and policies; formulation and implementation of public investment plans; inspection and supervision by state management agencies. The method of collecting secondary data and primary data (through sociological investigation) is used and combined with Statistical Package for the Social Sciences (SPSS) software to determine the influencing factors and find out the problems and their causes. Therefore, this study proposes a number of urgent and practical solutions to improve the state management of public investment in road construction and develop a synchronized road transport network.

Optimized green infrastructure planning at the city scale based on an interpretable machine learning model and multi-objective optimization algorithm: A case study of central Beijing, China

Green infrastructure (GI) has developed as a sustainable approach to the mitigation of urban floods. While machine learning (ML) models have exhibited advantages in urban flood simulation, their direct application to support the quantitative planning of GI at the city scale remains a challenge. To address this, an interpretable ML model based on support vector machine (SVM) and the Shapley additive explanations (SHAP) approach is integrated with the non-dominated sorting genetic algorithm-II (NSGA-II) in this study. The model is applied to the case of central Beijing, China, and demonstrates a robust performance with a high area under curve (AUC) value of 0.94. The results of the urban flood susceptibility assessment identify the urban-rural transition zone in the study area as being under a greater flood threat. Via model interpretation with SHAP, the dominant roles of GI and grey infrastructure (GrI) in preventing flood are revealed and the non-linear complementarity between the two is demonstrated to be more significant in study units with a GI proportion of less than 0.45. Supported by the NSGA-II-based optimization framework, optimal GI plans under different total implementations of GI are achieved, among which a solution with a 3.21% increase in the total GI area is selected as that with the best investment efficiency. The pattern of GI implementation is suggested to be dispersed and small-scale by model. This study provides a tool with broad application prospects, effectively integrating GI implementation with urban planning. The findings of this study not only provide important references for the determination of the priority areas of new ecological space in Beijing, but also provide areas that share similar characteristics with new insight into GI planning and the management of urban floods.

Evaluation of market transformation efficiency of urban investment and development companies based on the three-stage DEA model

Evaluation of market transformation efficiency of urban investment and development companies based on the three-stage DEA model

Fabrication of high-performance pervaporation desalination composite membranes with study of its acid-base stability

In the process of industrial production will produce a lot of acid and alkaline waste liquid, how to effectively treat acid and alkali waste liquid is an important topic at present. At present, there are some problems about the treatment of acid and alkali waste liquid, such as large investment, complicated process and low efficiency. Pervaporation has the characteristics of mild operating conditions and no influence of osmotic pressure threshold, so it has great application potential in the concentration, reuse and reduction of acid and alkali waste liquid. However, at present, conventional pervaporation dense membrane materials cannot maintain long-term stability in strong acid and alkali environment, in order to achieve this performance, we use perfluorosulfonic acid resin with good acid and alkali resistance as the dense layer substrate. PFSA/PTFE/PP composite membrane was prepared by spraying process, and the final prepared composite membrane had a pure water flux of 45 ± 1.2 kg/(m2∙h) at 70 ℃. The acid and alkali resistance of the intrinsic membrane and the composite membrane was evaluated, and it was found that the feed liquid was concentrated to 20 wt% after 19 h long concentration operation at 70℃ and starting liquid was 5 wt% H2SO4 and 5 wt% NaOH. The retention rate of acid and alkali can be maintained above 99.9 %. During the concentration of H2SO4 solution, the dense layer structure is affected, and the pure water flux of the composite membrane is reduced, eventually maintaining around 32 kg/(m2∙h). In the process of concentrating NaOH solution, the pure water flux of the composite membrane increased first and then decreased, and the final pure water flux of the membrane remained near 40 kg/(m2∙h).

Corporate credit mismatch, financial leverage and corporate investment efficiency

We empirically test the relationship between credit mismatch and corporate investment efficiency. The study analyzes the heterogeneity of mismatch direction, corporate nature, and corporate life cycle. Results reveal that corporate credit mismatch has a significant negative impact on corporate investment efficiency; corporate financial leverage fully mediates this impact, indicating that corporations may increase their financial leverage to bridge financing gaps in cases of credit mismatch. This practice, however, may bring about greater financial risk and affect corporate investment efficiency. This study provides an important reference for enterprises and financial institutions for optimizing the financing environment, ensuring the effective allocation of financing resources, promoting the sustainable development of enterprises, thereby enhancing overall economic efficiency. This study also provides new ideas and future directions for studying corporate financing and investment behavior.

Board bias, information, and investment efficiency

Board bias, information, and investment efficiency