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Can party organization participation in corporate governance enhance investment efficiency? The role of financialization

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  • Tang, Xu
  • Zeng, Lanrui
  • Wei, Yi

Abstract

This paper conducts an empirical study using the financial data from China’s non-financial listed companies from 2009 to 2023, focusing on the impact of party organization participation in corporate governance (POPCG) on the improvement of investment efficiency in listed companies. It also examines the role of corporate financialization in this process. The findings show that the degree of POPCG significantly improves investment efficiency. The effect of POPCG on investment efficiency is more pronounced in state-owned enterprises than in private enterprises. Furthermore, corporate financialization mediates the relation between POPCG and investment efficiency, with party organization involvement improving investment efficiency by restraining the enterprises’ excessive financialization. This mediating effect is particularly significant in companies with separate chairman and general manager roles.

Suggested Citation

  • Tang, Xu & Zeng, Lanrui & Wei, Yi, 2025. "Can party organization participation in corporate governance enhance investment efficiency? The role of financialization," Finance Research Letters, Elsevier, vol. 86(PD).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pd:s1544612325018252
    DOI: 10.1016/j.frl.2025.108571
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