Study on the Motives of Inefficient Investment of Listed Companies
Based on the fundamental theory of value effects of investment, this paper investigates the motives of inefficient investment of listed company in China. Regression results using 3155 Shanghai and Shenzhen listed company observations in 2003-2005 show that investment is sensitive to cash flows when we control the growth opportunity, suggesting that some degree of inefficient investment of listed companies exists. Moreover these relationships are much stronger for state-owned listed companies. The motive test show that investment is positively correlated to future operational performance significantly for both state-owned and nonstate-owned listed companies, which means the reason why listed companies engaged in inefficient investments lies in agent conflicts between shareholders and managers, therefore the main form of inefficient investment of listed companies is overinvestment.
Key words: Financial constraints; Agent conflicts; inefficient investment; Investment-cash flow sensitivity
- There are currently no refbacks.
How to do online submission to another Journal?
If you have already registered in Journal A, then how can you submit another article to Journal B? It takes two steps to make it happen:
1. Register yourself in Journal B as an Author
Find the journal you want to submit to in CATEGORIES, click on “VIEW JOURNAL”, “Online Submissions”, “GO TO LOGIN” and “Edit My Profile”. Check “Author” on the “Edit Profile” page, then “Save”.
Go to “User Home”, and click on “Author” under the name of Journal B. You may start a New Submission by clicking on “CLICK HERE”.
We only use three mailboxes as follows to deal with issues about paper acceptance, payment and submission of electronic versions of our journals to databases: email@example.com; firstname.lastname@example.org; email@example.com
Copyright © 2010 Canadian Research & Development Centre of Sciences and Cultures
Address: 9375 Rue de Roissy Brossard, Québec, J4X 3A1, Canada
Telephone: 1-514-558 6138