A blessing or a curse? Non-local mutual fund holdings and firm investment efficiency

Junqing Zuo, Wei Zhang, Chenghao Ruan and Xiong Xiong

Finance Research Letters, 2024, vol. 66, issue C

Abstract: In this paper, we investigate the association between non-local mutual fund holdings and firm investment efficiency. The fixed effects regression results show that firms with higher non-local mutual fund ownership tend to have lower investment efficiency. Further analysis indicate this negative relationship can be attenuated by high-quality internal control. Our study advances the literature by providing new evidence that non-local mutual fund ownership can have a significant influence on corporate investment decisions. Moreover, the results have important practical significance for regulators who are concerned with the efficiency of enterprise resource allocation.

Keywords: Non-local mutual fund holdings; Investment efficiency; Internal control (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324006548

DOI: 10.1016/j.frl.2024.105624

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