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Institutional investors' corporate site visits and resource extraction: Evidence from China

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  • Minhang Deng
  • Yunyi Wang
  • Gaoliang Tian
  • Bozhi Xu
  • Yuyan Tang

Abstract

This study examines the effect of corporate site visits on resource extraction. Taking advantage of China's mandatory disclosure of detailed investors' site visits information, we find that firms with more investors' site visits have lower levels of managerial private consumption and tunnelling. This association is more pronounced when the monitoring effect of corporate site visits is more efficient, and the agency problem is more severe. We utilise the two‐stage least squares (2SLS) estimation approach to demonstrate the robustness of our results. Collectively, our findings highlight the external monitoring role of investors' site visits in reducing corporate agency conflicts.

Suggested Citation

  • Minhang Deng & Yunyi Wang & Gaoliang Tian & Bozhi Xu & Yuyan Tang, 2023. "Institutional investors' corporate site visits and resource extraction: Evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(5), pages 5211-5243, December.
    • Handle: RePEc:bla:acctfi:v:63:y:2023:i:5:p:5211-5243
    DOI: 10.1111/acfi.13104
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