IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v94y2026ics1544612326001960.html

Governmental monitoring of outward FDI compliance and corporate investment inefficiency: Evidence from listed private companies in China

Author

Listed:
  • Hua, Chen
  • Li, Xia
  • Chen, Weizhong

Abstract

Exploiting a quasi-experimental policy transformation in China concerning private firms’ outward foreign direct investment (OFDI), we find that increased governmental monitoring of OFDI compliance significantly improves the investment efficiency of treated companies. This effect is driven by two underlying mechanisms: improved corporate compliance and more prudent investment decisions. Heterogeneity analyses reveal more pronounced effects among companies that are more susceptible to the agency problem of free cash flow and those with higher OFDI. This study underscores the role of governmental monitoring in shaping corporate investment behavior.

Suggested Citation

  • Hua, Chen & Li, Xia & Chen, Weizhong, 2026. "Governmental monitoring of outward FDI compliance and corporate investment inefficiency: Evidence from listed private companies in China," Finance Research Letters, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:finlet:v:94:y:2026:i:c:s1544612326001960
    DOI: 10.1016/j.frl.2026.109665
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612326001960
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2026.109665?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:94:y:2026:i:c:s1544612326001960. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.