Does supply network location affect corporate investment efficiency?

Jinyan Shi, Jianheng Yang and Yanxi Li

Research in International Business and Finance, 2020, vol. 51, issue C

Abstract: Using social network analysis, we compute a firm's network position characteristics and then examine their effects on firm investment efficiency. The results show that both supply network centrality and structural holes have no significant impact on corporate overinvestment but can ease corporate underinvestment by alleviating financial constraints. The specific paths are as follows: a firm that has a high level of centrality or rich structural holes in the supply network is more likely to obtain commercial credit and bank loans; however, supply network position has no significant impact on equity financing.

Keywords: Supply network; Agency conflict; Financial constraints; Overinvestment; Underinvestment (search for similar items in EconPapers)
JEL-codes: G31 G32 G34 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:51:y:2020:i:c:s0275531919308098

DOI: 10.1016/j.ribaf.2019.101107

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