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Government governance, executive networks and corporate investment efficiency

Author

Listed:
  • Xin Jin
  • Junli Yu

Abstract

Purpose - Owing to the importance of the investment behavior in China, the purpose of this paper is to find the influence of executive network and government governance on investment efficiency. Design/methodology/approach - The paper use China’s listed companies as sample to make an investment efficiency determinant model. Findings - In this article, the authors find that larger executive network and higher government governance will lead to more corporate investment efficient. Furthermore, the informal institution – executive network, is not only an effective way to alleviate financing constraints, but also can solve underinvestment problem. While the improvement of local government governance can provide institutional protection, it will also be more conducive to restrain overinvestment behavior. Research limitations/implications - The authors have not explored conduction path. Especially, the authors have not examined whether information spillover effect or the release of resources constraints in executive network plays a more important role to ease investment insufficient. Originality/value - Under the Chinese circumstance, relationship governance can not only promote companies to improve investment efficiency, but also provide an important guarantee for sustained macroeconomic growth.

Suggested Citation

  • Xin Jin & Junli Yu, 2017. "Government governance, executive networks and corporate investment efficiency," China Finance Review International, Emerald Group Publishing Limited, vol. 8(2), pages 122-139, December.
    • Handle: RePEc:eme:cfripp:cfri-06-2016-0053
    DOI: 10.1108/CFRI-06-2016-0053
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    Citations

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    Cited by:

    1. Luo, Xingwu & Huang, Feifei & Tang, Xiaobo & Li, Jialong, 2021. "Government subsidies and firm performance: Evidence from high-tech start-ups in China," Emerging Markets Review, Elsevier, vol. 49(C).
    2. Jia, Fansheng & Li, Guangzhong & Lu, Xiaoyan & Xie, Sujuan, 2021. "CEO given names and corporate green investment," Emerging Markets Review, Elsevier, vol. 48(C).
    3. Wu, Yihan & Dong, Bin, 2021. "The value of independent directors: Evidence from China," Emerging Markets Review, Elsevier, vol. 49(C).
    4. Li, Xinlan & Li, Changhong & Wang, Zhan & Jiao, Wenting & Pang, Yiwen, 2021. "The effect of corporate philanthropy on corporate performance of Chinese family firms: The moderating role of religious atmosphere," Emerging Markets Review, Elsevier, vol. 49(C).
    5. Wang, Xinyi & Zhu, Ling, 2023. "How does export VAT rebates policy affect corporate investment efficiency? Evidence from corporate tax stickiness," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
    6. Iman Harymawan & Mohammad Nasih & Dian Agustia & Fajar Kristanto Gautama Putra & Hadrian Geri Djajadikerta, 2022. "Investment efficiency and environmental, social, and governance reporting: Perspective from corporate integration management," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1186-1202, September.
    7. Jing, Wei & Zhang, Xueyong, 2021. "Online social networks and corporate investment similarity," Journal of Corporate Finance, Elsevier, vol. 68(C).
    8. Shilei Wu & Hongjie Zhang & Taoyuan Wei, 2021. "Corporate Social Responsibility Disclosure, Media Reports, and Enterprise Innovation: Evidence from Chinese Listed Companies," Sustainability, MDPI, vol. 13(15), pages 1-17, July.
    9. Wu, Ziqi & Xiao, Yi & Zhang, Jian, 2022. "Labor mobility and corporate investment—Evidence from a Quasi-natural experiment in China," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 1110-1129.
    10. Feng, Yumei & Yao, Shouyu & Wang, Chunfeng & Liao, Jing & Cheng, Feiyang, 2022. "Diversification and financialization of non-financial corporations: Evidence from China," Emerging Markets Review, Elsevier, vol. 50(C).
    11. Yang, Xiaoping & Cao, Dongmei & Andrikopoulos, Panagiotis & Yang, Zonghan & Bass, Tina, 2020. "Online social networks, media supervision and investment efficiency: An empirical examination of Chinese listed firms," Technological Forecasting and Social Change, Elsevier, vol. 154(C).
    12. Shi, Jinyan & Yang, Jianheng & Li, Yanxi, 2020. "Does supply network location affect corporate investment efficiency?," Research in International Business and Finance, Elsevier, vol. 51(C).
    13. Wang, Yun & Wilson, Craig & Li, Yanxi, 2021. "Gender attitudes and the effect of board gender diversity on corporate environmental responsibility," Emerging Markets Review, Elsevier, vol. 47(C).

    More about this item

    Keywords

    Governance; Investment efficiency; Executive network; G39; M41;
    All these keywords.

    JEL classification:

    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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