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Ownership Concentration, Financial Leverage and Inefficient Investment-evidence from Chinese A-share Market

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Listed:
  • Zhang Xinyuan
  • Bao Nan
  • Zhao Yufei

Abstract

This paper analyzes the data from Chinese A-share market during 2 years from 2014 to 2015. Basing on 2297 listed firms, we use theoretical analysis and empirical analysis to explore and validate the relationship between ownership concentration, financial leverage and the company's inefficient investment behavior. The result shows that in Chinese A-share market, financial leverage can effectively inhibit the company's inefficient investment behavior; the concentration of equity will effectively inhibit the company's inefficient investment behavior.

Suggested Citation

  • Zhang Xinyuan & Bao Nan & Zhao Yufei, 2017. "Ownership Concentration, Financial Leverage and Inefficient Investment-evidence from Chinese A-share Market," Applied Finance and Accounting, Redfame publishing, vol. 3(2), pages 70-75, August.
    • Handle: RePEc:rfa:afajnl:v:3:y:2017:i:2:p:70-75
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    References listed on IDEAS

    as
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    2. Dewan Mostafizur Rahman, 2016. "Investor Sentiment, Executive Compensation, and Investment – Some International Evidence: A Pitch," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 15(2), pages 428-433, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    ownership concentration; financial leverage; inefficient investment;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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