Financing liabilities and inefficient investment of listed companies: Based on the adjustment effect of different financial structures
Yuanyue Wang,
Zhaohui Yu and
Xiaojing Yi
Australian Economic Papers, 2022, vol. 61, issue 4, 848-875
Abstract:
For national development, the investment efficiency of listed companies should be improved. We take samples of non‐financial and non‐real estate listed companies to investigate the mechanism of financial liabilities on the inefficient investment behaviour of listed companies from a financial structure perspective. Results of our empirical research indicate an inverted U‐shaped relationship between financing liabilities and investment efficiency, and that financing liabilities inhibit underinvestment and exacerbate overinvestment. Operating liabilities were found to have a restraining effect on underinvestment. A bank‐led financial structure is more effective in regulating financing liabilities and alleviating overinvestment, while a market‐led financial structure is more conducive to regulating financing liabilities and, thus, curbs underinvestment. Therefore, a company's financial structure should be adjusted in a timely manner, according to demand, the scale of financial liabilities should be adjusted to reduce inefficient investment, and operational liabilities can be appropriately expanded. Additionally, attention should be focused on the role of administrative intervention and financial development to improve the investment efficiency of listed companies and eventually realise stable development of the national economy.
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
https://doi.org/10.1111/1467-8454.12240
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:bla:ausecp:v:61:y:2022:i:4:p:848-875
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0004-900X
Access Statistics for this article
Australian Economic Papers is currently edited by Daniel Leonard
More articles in Australian Economic Papers from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().