Purpose – The purpose of this paper is to study the relationship between financial reporting quality and investment efficiency in China. Design/methodology/approach – By analyzing institutional background and hypotheses development, the paper selected listed firms in China to be the study...

While the balance sheet structure of U.S. banks influences how they respond to liquidity risks, the mechanisms for the effects on and consequences for lending vary widely across banks. We demonstrate fundamental differences across banks without foreign affiliates versus those with foreign...

Business groups in emerging markets perform better than unaffiliated firms. One explanation is that business groups substitute some functions of missing institutions, for example, enforcing contracts. We investigate this by setting up a model where firms within the business group are connected...

The Benefit and Cost of Winner Picking: Redistribution Vs Incentives

Does efficient internal investment generally translate into successful external investment activities? In this research we use the internal capital allocation efficiency as a proxy for the efficiency of internal investment, and study whether firms that are internally efficient also make...

Tournaments are used in a variety of contexts for ranking competitors on an ordinal scale according to their relative achievements. From competitive sports to manager compensation, they provide a mechanism for incentivizing and selecting contestants in a world of incomplete information. This...

Organizational Capital Budgeting Model (OCBM) is a general theory of capital budgeting that incorporates traditional capital budgeting theories and the consideration about firm's information/ organization structure. The traditional financial capital budgeting model is a special case of OCBM....

Does efficient internal investment generally translate into successful external investment activities? In this research we use the internal capital allocation efficiency as a proxy for the efficiency of internal investment, and study whether firms that are internally efficient also make...

A major risk currently facing the Chinese economy is overcapacity, which affects the efficiency of social resource allocation (Xi et al., 2017; Huang et al., 2019). When a company is in crisis, the internal capital market often plays a propping role. This study approached this issue from the...