Government governance, executive networks and corporate investment efficiency
China Finance Review International
ISSN: 2044-1398
Article publication date: 12 December 2017
Issue publication date: 9 May 2018
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.
Keywords
Acknowledgements
The authors thank Guangyong Lei for helpful comments and valuable suggestions. All remaining errors and omissions are the authors own. The authors gratefully acknowledge financial support from National Natural Science Foundation of China for Young Scholars (Grant Nos 71402169, 71702102), Social Science Fund of China Zhejiang Province (Grant No. 14NDJC166YB), the China Postdoctoral Science Foundation (Grant Nos 2016M601606, 2017T100301), and the Humanity and Social Science Youth Foundation of Ministry of Education of China (Grant No. 15YJC790137).
Citation
Jin, X. and Yu, J. (2018), "Government governance, executive networks and corporate investment efficiency", China Finance Review International, Vol. 8 No. 2, pp. 122-139. https://doi.org/10.1108/CFRI-06-2016-0053
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited