Internal control level and enterprise strategic aggressiveness

Zhiyuan Cheng

Finance Research Letters, 2025, vol. 75, issue C

Abstract: This paper investigates the impact of internal control quality on firm strategic aggressiveness based on China's stock markets. By constructing a discrete variable to measure firm strategic aggressiveness and adopting the Dibo Internal Control Index as a proxy for internal control quality, an empirical analysis is conducted. The results indicate that internal control quality has a significant positive effect on firm strategic aggressiveness, meaning that improvements in internal control lead to more aggressive strategies adopted by firms. Further mediation analysis reveals that investment efficiency plays a crucial role in the process through which internal control quality influences firm strategic aggressiveness. Additionally, heterogeneity analysis demonstrates that, compared to state-owned enterprises, the positive impact of internal control quality on strategic aggressiveness is more pronounced in non-state-owned enterprises.

Keywords: Internal control; Investment efficiency; Strategic aggressiveness (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325000947

DOI: 10.1016/j.frl.2025.106829

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