Institutional investors’ site visits and corporate employment decision-making

Shaojie Lai, Xiaorong Li, Shiang Liu and Qing Sophie Wang

Journal of Contemporary Accounting and Economics, 2022, vol. 18, issue 3

Abstract: This study examines the effect of institutional investors’ site visits on corporate employment decision-making. Using a unique dataset of corporate site visits (CSVs) to the listed firms in China, we find that CSVs are associated with less labor investment inefficiency. The effect is more pronounced in firms with lower information quality, worse corporate governance, and severe financial constraints. Our results are robust to endogeneity concerns. Further analysis suggests that labor investment inefficiency leads to lower future performance. Overall, our results are consistent with the view that CSVs improve information quality, corporate governance, and access to finance, which in turn, mitigates inefficient labor investment.

Keywords: Corporate site visits; Labor investment inefficiency; Information quality; Corporate governance; Financial constraints (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:18:y:2022:i:3:s1815566922000273

DOI: 10.1016/j.jcae.2022.100332

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