What Drives Fixed Asset Holding and Risk- Adjusted Performance of Corporates in China? An Empirical Analysis

Yan Dong (), Charles Leung and Dongliang Cai
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Dongliang Cai: Southwestern University of Finance and Economics, China

International Real Estate Review, 2012, vol. 15, issue 2, 141-164

Abstract: This paper attempts to shed light on the over-investment debate by investigating listed firms in China. Firms with a higher level of fixed asset holding and overhead expenses, and covered by preferential tax policies in China are found to be associated with lower risk-adjusted performance. In addition, the preferential tax policies encourage fixed asset investment. In contrast to some of the previous literature, state-ownership of firms, dividend policies, and ownership concentration are not robust predictors of risk-adjusted performance, and debt level, managerial shareholding, and profit per unit of asset are not robust predictors of fixed asset investments.

Keywords: Fixed asset holding; Corporate real estate; Over-investment theory; State-ownership; Tax-favor policy (search for similar items in EconPapers)
JEL-codes: L85 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (11)

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Working Paper: What Drives Fixed Asset Holding and Risk-Adjusted Performance of Corporate in China? An Empirical Analysis (2011)
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