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A blessing or a curse? Non-local mutual fund holdings and firm investment efficiency

Author

Listed:
  • Zuo, Junqing
  • Zhang, Wei
  • Ruan, Chenghao
  • Xiong, Xiong

Abstract

In this paper, we investigate the association between non-local mutual fund holdings and firm investment efficiency. The fixed effects regression results show that firms with higher non-local mutual fund ownership tend to have lower investment efficiency. Further analysis indicate this negative relationship can be attenuated by high-quality internal control. Our study advances the literature by providing new evidence that non-local mutual fund ownership can have a significant influence on corporate investment decisions. Moreover, the results have important practical significance for regulators who are concerned with the efficiency of enterprise resource allocation.

Suggested Citation

  • Zuo, Junqing & Zhang, Wei & Ruan, Chenghao & Xiong, Xiong, 2024. "A blessing or a curse? Non-local mutual fund holdings and firm investment efficiency," Finance Research Letters, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324006548
    DOI: 10.1016/j.frl.2024.105624
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