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Marketing investment, financial leverage, and corporate investment efficiency

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  • Wang, Bo
  • Wang, Jixiang
  • Zhang, Mengqi

Abstract

The impact of marketing investment on investment efficiency has become an increasingly relevant issue for firms navigating financial constraints. Drawing on data from A-share listed firms in China, this paper examines the relationship between marketing investment and investment efficiency, with a focus on its moderating role in alleviating the negative effects of financial leverage. The findings reveal that marketing investment significantly enhances firms’ investment efficiency by reducing over-investment rather than addressing under-investment. This effect is more pronounced in non-state-owned and larger firms. Mechanism analysis indicates that marketing investment helps mitigate the adverse impact of financial leverage on investment efficiency.

Suggested Citation

  • Wang, Bo & Wang, Jixiang & Zhang, Mengqi, 2025. "Marketing investment, financial leverage, and corporate investment efficiency," Finance Research Letters, Elsevier, vol. 85(PA).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pa:s1544612325011390
    DOI: 10.1016/j.frl.2025.107881
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