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Stakeholder-oriented corporate investment: A catering perspective

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  • Gu, Leilei
  • Zhang, Huilin

Abstract

Exploring the staggered adoption of state constituency statutes as quasi-exogenous shocks, we find that enforcement of stakeholder orientation encourages corporate investment, especially for younger and more opaque firms, which is consistent with the top-down theory of capital budgeting of Almazan et al. (2017). Our evidence suggests that corporate insiders have a catering motive in investment decisions: to convey favorable information to stakeholders through increasing capital investments.

Suggested Citation

  • Gu, Leilei & Zhang, Huilin, 2022. "Stakeholder-oriented corporate investment: A catering perspective," Finance Research Letters, Elsevier, vol. 48(C).
    • Handle: RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322001428
    DOI: 10.1016/j.frl.2022.102863
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    References listed on IDEAS

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    Cited by:

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    3. Mihail Busu & Madalina Vanesa Vargas & Sorin Anagnoste, 2023. "Navigating the Intricate Relationship between Investments and Global Output: A Leontief Matrix Case Study of Romania," JRFM, MDPI, vol. 16(12), pages 1-21, December.
    4. Yadu Zhang & Yiteng Zhang & Zuoren Sun, 2023. "The Impact of Carbon Emission Trading Policy on Enterprise ESG Performance: Evidence from China," Sustainability, MDPI, vol. 15(10), pages 1-27, May.
    5. Hu, Xiaoxue & Li, Dongxu & Wang, Jingni, 2024. "Green-selecting: Foreign institutional ownership and corporate green practices," Finance Research Letters, Elsevier, vol. 62(PB).

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    More about this item

    Keywords

    Stakeholder orientation; Corporate investment; Quasi-exogenous shock; Catering;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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