| id |
eprints-32624
|
| recordtype |
eprints
|
| institution |
SOAS, University of London
|
| collection |
SOAS Research Online
|
| language |
English
|
| language_search |
English
|
| description |
Using a large panel of Chinese listed firms over the period 1998–2014, we document strong evidence of investment inefficiency, which we explain through a combination of financing constraints and agency problems. Specifically, we argue that firms with cash flow below (above) their optimal level tend to under- (over-)invest as a consequence of financial constraints (agency costs). Furthermore, focusing on under-investing firms, we highlight that the sensitivities of abnormal investment to free cash flow rise with traditionally used measures of financing constraints, while for over-investing firms, the sensitivities increase with a wide range of firm-specific measures of agency costs.
|
| format |
Journal Article
|
| author |
Yang, Junhong
|
| author_facet |
Yang, Junhong
Alessandra, Guariglia
|
| authorStr |
Yang, Junhong
|
| author_letter |
Yang, Junhong
|
| author2 |
Alessandra, Guariglia
|
| author2Str |
Alessandra, Guariglia
|
| title |
A Balancing Act: Managing Financial Constraints and Agency Costs to Minimize Investment Inefficiency in the Chinese Market
|
| publisher |
Elsevier
|
| publishDate |
2016
|
| url |
https://eprints.soas.ac.uk/32624/
|
