IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v32y2025i12p1709-1715.html
   My bibliography  Save this article

Political governance and corporate investment efficiency in China

Author

Listed:
  • Lei Cheng
  • Yue Li

Abstract

The involvement of the Communist Party of China (CPC) in corporate decision-making has formed a governance model with ‘Chinese characteristics’ that diverges from commonly studied governance models. This paper provides direct insight into China’s political governance model by examining how the Party organization influences the investment efficiency of private firms. We find that increasing the proportion of Party directors (i.e. stronger political governance) improves the investment efficiency of private firms. This finding survives various robustness checks. The mediation analysis suggests that Party organizations promote corporate investment efficiency by playing advisory and supervisory roles in corporate governance. One policy implication is that, from the perspective of improving investment efficiency, the CPC should encourage private firms to invite more Party organization members to the board of directors, supervisory board, or management.

Suggested Citation

  • Lei Cheng & Yue Li, 2025. "Political governance and corporate investment efficiency in China," Applied Economics Letters, Taylor & Francis Journals, vol. 32(12), pages 1709-1715, July.
    • Handle: RePEc:taf:apeclt:v:32:y:2025:i:12:p:1709-1715
    DOI: 10.1080/13504851.2024.2313555
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13504851.2024.2313555
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13504851.2024.2313555?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

    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:taf:apeclt:v:32:y:2025:i:12:p:1709-1715. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    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.