Investment Efficiency Of Enterprises Research Articles

The Digital Inclusive Finance and Investment Efficiency of Enterprises: Evidence from Perspective of Financialization

Digital inclusive finance, a byproduct of traditional banking and digital technology, has a substantial effect on the financial standing of businesses. Using information from Chinese A-share listed firms between 2011 and 2018, this paper empirically investigates the connection between the emergence of digital financial inclusion and investment efficiency and financialization of real enterprises, as well as their underlying mechanisms. The results show that digital financial inclusion rises a suppressive effect on the investment efficiency of enterprises. Further, this effect is influenced by other control factors. The mechanism test shows that digital financial inclusion enhances the process of financialization of corporations. Findings of this paper help clarify the mechanism of the role of digital inclusive finance. Based on the empirical findings, this paper recommends controlling the unrestricted promotion of digital inclusive finance but encouraging balanced expand.

Monetary Policy and Enterprise Investment Efficiency: Perspective from Enterprise Financing Constraints

Combining theoretical analysis and empirical research, this paper constructs a theoretical framework for the threshold model on the basis of a review and classification of relevant documents, for instance the empirical study on the existence of monetary policy bank credit channels and the study on the micro transmission mechanism of China's monetary policy credit channels. Based on the actual situation in China and the current state of China's enterprise financing policies, financing constraints, and investment efficiency, this article selects the data of listed companies in China from 2015 to 2021, chooses the balanced panel data as the research object, and obtains 8745 samples from 11624 samples via the balanced panel processing. The empirical analysis of descriptive analysis and regression analysis indicates that when the national monetary policy is maintained at a permissive level, the efficiency of SME joint investment portfolios may be considerably enhanced. In the future, the main monetary policy objectives when China is implemented should be scientifically formulated according to the main characteristics of the behaviors of microeconomic subjects in different industries as much as possible, and a differential monetary policy more suitable for "targeted" development should be adopted to maximize the effect of economic policy, so as to effectively promote the rapid and healthy growth and progress of small and medium-sized enterprises and the stable, sustainable and coordinated development of regional economic development.

Public attention and investment efficiency: Incentive effect or deterrent effect? Analysis on heterogeneous bilateral stochastic frontier model

Based on the attention theory and agent theory, the research expands the research on the influencing factors of the company's investment behavior and further analyzes the causes of investment behavior from the perspective of public concern. This study uses the data on Chinese listed companies for the first time to empirically analyze the influence of public attention on enterprise investment behavior and its mechanism, which fills the gap of the lack of research in related fields and provides an important supplement to the research on the relationship between management heterogeneity and investment behavior. Considering that there may be endogenous problems in the model, this study further uses identification strategies, such as executive transition analysis and panel tool variable estimation, and all the results show that public attention can significantly improve the investment level of enterprises. Finally, this study uses media attention based on the Baidu search index and quantitative indicators of financial news from newspapers to conduct a series of robustness tests further to prove the robustness and reliability of the regression models. It is found that public attention has a significant positive effect on investment efficiency, strategy formulation, and internal control of enterprises and has a certain deterrent effect that has a more obvious positive effect on the investment efficiency of large enterprises. Public attention has promoted the investment efficiency of enterprises and had a certain incentive effect through governance mechanisms such as the overseas experience of executives, consistent design of management interests, and mitigation of short-sightedness of the management. In the process of enterprise management and operation, we should correctly treat the influence of public concern and attach importance to the structure configuration of management.

Impact of Low-Carbon City Policy on Enterprise Investment Efficiency: Based on the Heterogeneity of Chinese Urban Culture.

Based on panel data of Chinese listed companies, this paper estimates the impact of low-carbon city policy (LCCP) on enterprise investment efficiency (EIE) by the heterogeneous timing difference in differences (HTDID) method and examines the heterogeneous effect of urban culture on the impact. The results show that LCCP improves EIE, and the research conclusion passes the robustness tests. Mechanism analysis reveals that LCCP mainly acts on EIE along two paths: promoting enterprise technological innovation and easing financing constraint. But the LCCP does not have a significant effect on resource allocation. On urban culture heterogeneity, the ecological wisdoms of green urban culture and Confucian culture, such as benevolence to all beings and the harmony between man and nature, help to enhance the promoting effect of LCCP on EIE. From the perspectives of the synergistic development between formal and informal institutions and of urban cultural governance, this research provides important reference and data support to EIE improvement.

Tax preference, financing constraints and enterprise investment efficiency-Experience, of China's enterprises investment.

This paper takes the 2014 pilot project of accelerated depreciation of fixed assets as a quasi-natural experiment, and builds a Propensity Score Matching-Difference in Differences (PSM-DID) model based on the data of Chinese listed companies from 2000 to 2019 to test the impact of tax preference on enterprise investment efficiency and its mechanism. The results show that the policy inhibits supported enterprises investment efficiency significantly. Heterogeneity analysis shows that the policy causes greater investment efficiency losses for small and medium-sized enterprises, non-state-owned enterprises and asset-heavy enterprises. The mechanism test found the reason why the policy eased financing constraints but inhibited investment efficiency in short-term. After a variety of robustness tests, the above basic conclusions are still valid. Although the accelerated depreciation policy of fixed assets is conducive to expanding the scale of investment, the incentive effect on investment efficiency is not obvious, and even shows a restraining effect. Given the existence of heterogeneity, the design of the policy should not only distinguish industries, but also pay attention to the differences between different enterprises in the same industry. Strengthening research and development (R&D) innovation and improving the matching mechanism between human capital and fixed investment will help give full play to the incentive effect of this policy. The research in this paper helps to deepen the understanding of the microeconomic effects of tax policy and identify the internal mechanism, which not only enriches the relevant literature, but also provides a reference for the government to better use tax policy to promote the high-quality development of enterprises.

Economic Policy Uncertainty and Corporate Inefficient Investment: A Research Based on Fixed Effects Model with Evidence from China

Investment decision-making is the core of corporate financial decision-making, which has a vital influence on investment income and shareholder wealth. This paper will use the fixed effects model to study the relationship between policy certainty and inefficient investment of enterprises, and the data of Chinese companies used are from the CSMAR database. This article first studies the correlation between inefficient investment and policy uncertainty. Based on the research on the relationship between economic policy uncertainty and corporate inefficient investment, this paper finds that economic policy uncertainty has a negative impact on the investment efficiency of enterprises. This conclusion is still valid after a series of robustness tests, including adding some omitted variables and fixed effects of the research year and industry. And through heterogeneous analysis, this paper finds that the investment efficiency of small-scale and low-quality auditing companies is more affected by economic policy uncertainty.

The Impact of ESG and the Characteristics of the Board of Directors on Investment Efficiency: A Case Study of Chinese Listed Companies

The board of directors is an important organization leading the company's decision-making. The different personal characteristics of the members of the board of directors directly affect the choice of decision-making, and then affect the investment efficiency; Social responsibility is a behavior in that enterprises are closely connected with the external environment. Therefore, this paper takes Chinese listed companies from 2016 to 2020 as a sample and makes an empirical study with the Ordinary Least Square method to explore the impact of board characteristics and corporate social responsibility on corporate investment efficiency. The results show that: 1) the higher the proportion of male directors, the older the average age of directors, and the enterprises with no overseas background among directors, the more inclined to implement corporate social responsibility. 2) The better corporate social responsibility performance has a positive and significant impact on the company's investment efficiency. 3) The older the average age of the members of the board of directors, the company with no overseas background in the board of directors and no financial background in the board of directors, and the company with the same director as the chairman and general manager, the investment efficiency will be better. 4) The implementation of corporate social responsibility does not make up for the negative impact of the characteristics of board members on enterprise investment efficiency. This paper also puts forward corresponding suggestions based on the research findings.

Carbon emissions trading system and investment efficiency: Evidence from China

The economic consequences of environmental regulations remain controversial. This study examines the impact of carbon emissions trading on enterprises’ investment efficiency. The results show that carbon emissions trading restrains over-investment and promotes the investment efficiency of enterprises. Additionally, this relationship is more significant in enterprises in higher levels of corporate governance and state-owned enterprises. This study enriches the literature on emissions trading systems from the perspective of micro resource allocation efficiency, enriches the application of the Porter hypothesis, and expands the relevant research on the factors affecting enterprise investment efficiency. Moreover, the results have important practical significance for governments implementing carbon emission reduction policies and enterprises participating in carbon emissions trading.

Impact of Managerial Discretion “Stranglehold” on Enterprises Investment Efficiency: Based on Heterogeneous Stochastic Frontier Model

ABSTRACT This study examined how managerial discretion “stranglehold” influences enterprise investment efficiency (IE) using a heterogeneous stochastic frontier model of 2010–2019 data of listed companies in the Shanghai and Shenzhen A-share markets. CEO’s salary and stockholding can improve IE, but cannot reduce investment risk (IR). CEO duality and redundant resources neither improve IE nor reduce IR. Organizational inertia can reduce IR but not IE. Capital intensity increases IR whereas environmental richness reduces it; both cannot improve IE. Constrained managerial discretion brings investment expenditures to 15–25% below optimal. Relatively, large, non-state-owned, and manufacturing enterprises have higher IE and lower IR.

Empirical Analysis of Supplier Inefficient Investment at Customer Risks Based on Supply Chain Data

As for whether the customer risk leads to the inefficient investment of suppliers, 776 suppliers and customers of Shanghai and Shenzhen A-shares from 2007 to 2017 are chosen as the supply chain data of listed companies, the relationship between customer risk and supplier enterprise investment efficiency is studied by manual sorting, and the moderating effect of the nature of supply chain relationship on customer risk and enterprise investment efficiency is taken into account. According to the research, the customer risk will reduce the investment efficiency of supplier enterprises, which is manifested as underinvestment. Based on further research, the relationship is more significant in supplier enterprises with a higher customer concentration and state-owned enterprises that are customers and suppliers. The research of this paper enriches the relevant literature on investment efficiency and the relationship between customer and supplier, provides a new perspective for studying investment efficiency and the empirical evidence for risk prevention behavior among enterprises, and has important practical significance for supplier enterprises to choose core customers and manage customer relations.

Does FinTech improve the investment efficiency of enterprises? Evidence from China’s small and medium-sized enterprises

Using the number of FinTech firms in each prefecture-level city to measure its development, this study explores the impact of FinTech on the investment efficiency of small and medium-sized enterprises (SMEs). The results show that FinTech development can significantly promote the investment efficiency of local SMEs. These results remain robust after conducting a series of robustness tests, including replacing alternative, dependent variables, controlling for firm fixed effects, controlling for time-varying fixed effects, and using the instrumental variable approach and Difference-in-difference (DID) methods. The mechanism analysis shows that FinTech alleviates the financing constraints of SMEs by reducing the information asymmetry between financial institutions and SMEs, thereby improving their investment efficiency. In addition, a heterogeneity analysis shows that the impact of FinTech on the investment efficiency of SMEs is more pronounced in small-scale private enterprises, industries lacking competition, and cities with slow marketization. Moreover, the findings have important practical significance in the form of policy suggestions for promoting the integration of FinTech and the real economy.

Can green credit policy improve the overseas investment efficiency of enterprises in China?

Nowadays, countries around the world are increasingly emphasizing the green concept in their foreign investment cooperation. As an important means to guide the green development of China's economy, green credit policy may affect the overseas investment decisions of Chinese enterprises and ultimately affect the investment efficiency. Based on the overseas direct investment data of Chinese A-share listed companies from 2007 to 2019, this paper calculates the overseas investment efficiency at the enterprise level by expanded Richardson model, and further tests the influence of green credit policy on the overseas investment efficiency of Chinese enterprises. The results show that green credit policy can improve the efficiency of enterprises' overseas investment, especially for state-owned enterprises and enterprises in low environmental regulations areas. Therefore, China's financial institutions should strengthen the implementation of green credit policies and formulate differentiated credit schemes for enterprises with different characteristics under the supervision of relevant departments. The results of this paper verify the effectiveness of the green credit policy, which is very important for accelerating the green development of China's overseas investment.

Does employee representation affect corporate investment efficiency? Evidence from China’s capital market

ABSTRACT This paper is the first empirical study of the economic consequences of the adoption of the employee director system in China from the perspective of the investment efficiency of enterprises, that is, based on empirical study of China’s capital market in order to test the relationship between employee directors and the investment efficiency of listed companies. The results show that employee directors can improve the investment efficiency of listed companies effectively, and this relationship is more significant for state-owned enterprises and enterprises in product markets with low levels of competition. Further research shows that employee directors can restrain not only overinvestment but can also reduce underinvestment. Employee directors can restrain the overinvestment behaviour of state-owned enterprises effectively and reduce underinvestment by non-state-owned enterprises. In product markets with low levels of competition, employee directors can restrain overinvestment, while in product markets with high levels of competition, employee directors can reduce underinvestment.

The Influence Mechanism of Industrial Policy on Enterprise Investment Efficiency—Based on Market Competition and Government Support Perspective

This paper explores the mechanism of market access, tax incentives, government subsidies, and bank credit industrial policies on the efficiency of enterprise investment based on the perspective of market forces and government support. The industrial policy of lowering market access intensifies market competition, which shifts the market share from inefficient enterprises to more efficient ones and increases the efficiency of enterprise investment; the industrial policy of tax incentives increases the profit margin between the price of production factors and the selling price of commodities, which increases the return of enterprise investment and increases the efficiency of investment accordingly; the industrial policy of government subsidies distorts the price of resource factors and leads to overcapacity, which decreases the efficiency of enterprise investment; the industrial policy of bank credit, where credit resources are used to support and encourage enterprises to invest. The government's subsidized industrial policy will distort the price of resource factors, leading to overcapacity and lowering the efficiency of enterprise investment; bank credit industrial policy, credit resources used to support encouraging industries will raise the financing cost of other industries in disguise and reduce the efficiency of enterprise investment.

Impact of Digital Finance on Corporate Efficient: Evidence from Empirical Research in China

Based on the annual corporate data of Shanghai and Shenzhen A-shares from 2011 to 2018 and the Digital Financial Inclusion Index of Peking University, this paper empirically examines the impact of China's digital finance development on the investment efficiency of enterprises. The research finds that: the development of digital finance reduces the investment efficiency of enterprises. This may be due to the development of digital finance leading to the financialization of enterprises. This paper puts forward how to guide digital finance in a good direction to influence the investment efficiency of enterprises.

Can Managing Overseas Experience Improve Investment Efficiency

The efficient investment of enterprises is inseparable from the professional ability of managers. It has been found that the overseas experience of corporate executives can improve the investment ability of managers.This paper takes Shanghai and Shenzhen A-share listed companies from 2004 to 2020 as the research object, and investigates whether managers' overseas experience can improve the investment efficiency of enterprises. The empirical analysis results show that enterprises with overseas managers can improve the phenomenon of over investment, but the impact on the underinvestment is not significant.Based on the empirical results, it is found that the characteristics of managerial returnees have different impacts on enterprises in different industries. Compared with export-oriented enterprises, the characteristics of managerial returnees have more significant impacts on export-oriented enterprises.The reason for these results may be that managers' overseas experience is more conducive to the development of non-export-oriented enterprises.

English

Using the data of A-share listed companies in Shanghai and Shenzhen stock exchanges from 2008 to 2017, this paper empirically tests the moderating role of ownership structure between financing constraints and inefficient investment. The study found that rational use of the moderating effect of ownership structure is of great significance to improve the investment efficiency of enterprises. When there are financing constraints, managerial ownership is more sensitive to the improvement of inefficient investment. The concentration of equity strengthens the sensitivity of insufficient investment caused by financing constraints, intensifies the degree of insufficient investment of enterprises, and the state-owned holding enterprises are more affected. On this basis, the paper puts forward relevant policy suggestions to improve the inefficient investment of enterprises.   Key words: Financing constraints, inefficient investment, ownership structure, adjustment effect.

Research on the investment efficiency based on grey correlation-DEA model.

Small and medium-sized enterprises (SMEs) are an important part of stimulating market vitality. In the post-pandemic era, the ability of SMEs to absorb employment plays an important role in stabilizing society and promoting economic growth. This paper selects 226 sample data from 2014 to 2017 measures the investment efficiency of small and medium-sized enterprises and makes a further analysis its influencing factors. Because there is a lag between investment and output. In this paper, the grey correlation analysis is used. Measuring the investment efficiency of SMEs by using BBC-DEA method. The study found that the overall investment efficiency of SMEs is low. Considering from the inside of the enterprise, this paper uses the Tobit model to make an empirical analysis. It is found that the influence of board structure and agency cost on investment efficiency are significantly negative. Growth, ownership concentration, equity incentive, salary incentive, profitability of SMEs have a significant positive effect on the investment efficiency of enterprises.

CEO-CFO Social Relationships and Enterprise Investment Efficiency

Investment, as an important part of corporate economic activities, plays an important role in companies participating in market competition. A large number of studies have shown that serious executive inefficiency investment behaviors are common in listed companies. Senior managers control the investment decision-making power of enterprises, affect the efficiency of capital allocation, and then determine enterprises’ market competitiveness and development prospects. With the in-depth study of the economic effect of social network on the capital market, some scholars have shown that social network has the role of information sharing in mutually beneficial transactions. China is a relationship-based country, and social relationships are reflected in many aspects of life. In sociology, social network is defined as a group of connected people in the same community（such as residence, school, and work unit）. This article uses the personal information of CEOs and CFOs to construct the social relationship index between CEOs and CFOs, which is measured by alumni relationship or fellow-villager relationship. In order to verify whether the social relationship between CEOs and CFOs can help to strengthen the information communication between the executive team and improve investment efficiency, this article uses 2007-2019 A-share listed companies as a research sample, and uses a combination of normative research and empirical research to study the impact of CEO-CFO social relationships on the investment efficiency of enterprises. The study finds that enterprises with a social relationship between CEOs and CFOs have higher investment efficiency. And when CEOs have no financial background, the CEO-CFO social relationship has a stronger role in promoting the investment efficiency of enterprises. The research results show that the CEO-CFO social relationship helps CEOs and CFOs communicate better, and then make more effective investment decisions. This article further examines the moderating effect of industry competition. The study finds that when the industry competition becomes more intense, the CEO-CFO social relationship has a stronger role in promoting the investment efficiency of enterprises. This article provides empirical evidence for how social relationships affect the information communication of the senior management team, and helps to understand the impact of the social network of the senior management team on corporate investment behavior. With the continuous improvement of China’s institutional environment, financial work has played a key role in the continuous growth of enterprises. More and more CFOs are involved in major corporate decisions. Some listed companies even require the successor CEOs to have professional background of CFOs. Therefore, the research conclusions of this article are also helpful to understand the important role of CFOs in corporate investment decision-making and have certain enlightenment for enterprises to build a reasonable management team.

Can higher levels of disclosure bring greater efficiency: Empirical research on the effect of government information disclosure on enterprise investment efficiency

Government Information disclosure (GID) is an important part of Chinese efforts in improving doing-business environment. Based on the sample of China's listed enterprises, this paper studies the effect of government information disclosure on enterprise investment efficiency. We find that GID significantly improves enterprise investment efficiency, and this effect is stronger for non-SOE, and enterprises in regulated industries. Mechanism analysis suggests that when policy uncertainty is higher, the promotion effect of GID on enterprise investment efficiency is stronger. The analysis based on enterprises' survey data shows that the higher level of GID is associated with the lower enterprises' perception of policy uncertainty. These suggest that GID improves enterprise investment efficiency and raise the doing-business environment by reducing policy uncertainty.