Institutional investor horizons, ownership structure and investment efficiency in China
This paper investigates the effects of institutional investor horizons on investment efficiency in China. By analysing 26,831 firm‐year observations from Chinese listed companies, we find that long‐term (short‐term) institutional ownership is negatively (positively) associated with the level of inef...
Saved in:
Published in | Accounting and finance (Parkville) Vol. 64; no. 1; pp. 739 - 782 |
---|---|
Main Authors | , , |
Format | Journal Article |
Language | English |
Published |
Clayton
Blackwell Publishing Ltd
01.03.2024
|
Subjects | |
Online Access | Get full text |
Cover
Loading…
Summary: | This paper investigates the effects of institutional investor horizons on investment efficiency in China. By analysing 26,831 firm‐year observations from Chinese listed companies, we find that long‐term (short‐term) institutional ownership is negatively (positively) associated with the level of inefficient investments. A battery of robustness tests indicates causality. Further analyses reveal that the rise in environmental uncertainty and information asymmetry are transmission channels for increased inefficient investments. Moreover, we find that the single controlling shareholder and state owner can curb the management myopia induced by short‐term institutional investors while they do not impede the monitoring effort of long‐term institutional investors. |
---|---|
ISSN: | 0810-5391 1467-629X |
DOI: | 10.1111/acfi.13164 |