IDEAS home Printed from https://ideas.repec.org/a/pal/palcom/v10y2023i1d10.1057_s41599-023-02107-w.html
   My bibliography  Save this article

The power influence of executives and corporate investment efficiency: empirical evidence from Chinese state-owned enterprises

Author

Listed:
  • Yewei Huang

    (College of Modern Economics and Management of Jiangxi University of Finance and Economics)

  • Junqin Qiu

    (College of Modern Economics and Management of Jiangxi University of Finance and Economics)

Abstract

Previous literature has explored investment efficiency in terms of executive incentives, supervisory mechanisms, information disclosure, agency conflicts, and managerial capabilities. This study focuses on analysing the power influence of executives in the context of Chinese State-Owned Enterprises (SOEs) from the two hypotheses of “economic man” and “social man”, aiming to improve the research between the power influence of executives and investment efficiency. This study adopts principal component analysis to comprehensively evaluate the power influence of executives in Chinese SOEs from four dimensions, namely, organisational position influence, personal competence influence, industry influence, and prestige influence. Using the analytical tool STATA15 to establish a regression model, the mechanism of executive power influence on investment efficiency is explored from the logic of “financing constraints” and “diversification”. It then explores the moderating effects of equity concentration and independent director oversight. The empirical results show that the greater the power influence of the executive, the lower the investment efficiency. The intermediary mechanisms of this study find that executives of Chinese SOEs can use their power influence to reduce financing constraints, obtain more resources, and make diversified investments, thus generating inefficient investments. This study also finds that equity concentration and oversight by independent directors have a positive moderating effect on executive power and investment efficiency. The results of this study are robust due to the use of the instrumental variables approach. The innovation of this study integrates the measurement of executive power influence in the particular context of SOEs and analyzes its impact on investment efficiency. It enriches the study of factors influencing executive power and corporate investment efficiency.

Suggested Citation

  • Yewei Huang & Junqin Qiu, 2023. "The power influence of executives and corporate investment efficiency: empirical evidence from Chinese state-owned enterprises," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.
    • Handle: RePEc:pal:palcom:v:10:y:2023:i:1:d:10.1057_s41599-023-02107-w
    DOI: 10.1057/s41599-023-02107-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41599-023-02107-w
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41599-023-02107-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wang, Jiangyuan & Wang, Hua & Wang, Di, 2021. "Equity concentration and investment efficiency of energy companies in China: Evidence based on the shock of deregulation of QFIIs," Energy Economics, Elsevier, vol. 93(C).
    2. Katrina Graham & Jonathan Ziegert & Johnna Capitano, 2015. "The Effect of Leadership Style, Framing, and Promotion Regulatory Focus on Unethical Pro-Organizational Behavior," Journal of Business Ethics, Springer, vol. 126(3), pages 423-436, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lin, Ouwen & Guan, Jianbo, 2024. "The impact of media attention, board independence on CEO power, and ESG in state-owned enterprises," Finance Research Letters, Elsevier, vol. 62(PA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lin Xu & Jigan Wang, 2020. "Influence of Challenge–Hindrance Stressors on Unethical Pro-Organizational Behavior: Mediating Role of Emotions," Sustainability, MDPI, vol. 12(18), pages 1-17, September.
    2. Zhu Yao & Jinlian Luo & Na Fu & Xianchun Zhang & Qunchao Wan, 2022. "Rational Counterattack: The Impact of Workplace Bullying on Unethical Pro-organizational and Pro-family Behaviors," Journal of Business Ethics, Springer, vol. 181(3), pages 661-682, December.
    3. Tian, Jinfang & Sun, Siyang & Cao, Wei & Bu, Di & Xue, Rui, 2024. "Make every dollar count: The impact of green credit regulation on corporate green investment efficiency," Energy Economics, Elsevier, vol. 130(C).
    4. Liu, Xin Lucy & Lu, Jackson G. & Zhang, Hongyu & Cai, Yahua, 2021. "Helping the organization but hurting yourself: How employees’ unethical pro-organizational behavior predicts work-to-life conflict," Organizational Behavior and Human Decision Processes, Elsevier, vol. 167(C), pages 88-100.
    5. Xianchun Zhang & Zhu Yao, 2019. "Impact of relational leadership on employees’ unethical pro-organizational behavior: A survey based on tourism companies in four countries," PLOS ONE, Public Library of Science, vol. 14(12), pages 1-19, December.
    6. Xin Liu, 2019. "The Role of Enterprise Risk Management in Sustainable Decision-Making: A Cross-Cultural Comparison," Sustainability, MDPI, vol. 11(10), pages 1-15, May.
    7. Christopher M. Castille & John E. Buckner & Christian N. Thoroughgood, 2018. "Prosocial Citizens Without a Moral Compass? Examining the Relationship Between Machiavellianism and Unethical Pro-Organizational Behavior," Journal of Business Ethics, Springer, vol. 149(4), pages 919-930, June.
    8. Liu, Yang & Pham, Ha & Mai, Yong, 2024. "Green investment policy and maturity mismatch of investment and financing in China's heavily polluting enterprises," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 1145-1158.
    9. Will Bryant & Stephanie M. Merritt, 2021. "Unethical Pro-organizational Behavior and Positive Leader–Employee Relationships," Journal of Business Ethics, Springer, vol. 168(4), pages 777-793, February.
    10. Wan Jiang & Bingqian Liang & Linlin Wang, 2023. "The Double-Edged Sword Effect of Unethical Pro-organizational Behavior: The Relationship Between Unethical Pro-organizational Behavior, Organizational Citizenship Behavior, and Work Effort," Journal of Business Ethics, Springer, vol. 183(4), pages 1159-1172, April.
    11. Cheng, Ken & Wei, Feng & Lin, Yinghui, 2019. "The trickle-down effect of responsible leadership on unethical pro-organizational behavior: The moderating role of leader-follower value congruence," Journal of Business Research, Elsevier, vol. 102(C), pages 34-43.
    12. Hana Huang Johnson & Elizabeth E. Umphress, 2019. "To Help My Supervisor: Identification, Moral Identity, and Unethical Pro-supervisor Behavior," Journal of Business Ethics, Springer, vol. 159(2), pages 519-534, October.
    13. Kong, Dongmin & Ji, Mianmian & Liu, Lihua, 2023. "Mandatory dividend policy and investment efficiency within state-owned business groups," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).
    14. Tom Entwistle & Heike Doering, 2024. "Amoral Management and the Normalisation of Deviance: The Case of Stafford Hospital," Journal of Business Ethics, Springer, vol. 190(3), pages 723-738, March.
    15. Tomasz Gigol, 2020. "Influence of Authentic Leadership on Unethical Pro-Organizational Behavior: The Intermediate Role of Work Engagement," Sustainability, MDPI, vol. 12(3), pages 1-14, February.
    16. Taolin Wang & Lirong Long & Yong Zhang & Wei He, 2019. "A Social Exchange Perspective of Employee–Organization Relationships and Employee Unethical Pro-organizational Behavior: The Moderating Role of Individual Moral Identity," Journal of Business Ethics, Springer, vol. 159(2), pages 473-489, October.
    17. Geng, Huixia & Zhu, Hongbing & Lau, Wei Theng & Razak, Nazrul Hisyam Ab & Nor, Normaziah Mohd, 2024. "Exacerbate or alleviate? Impact of controlling shareholders' share pledging on over-investment," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    18. Zhang, Teng & Xu, Zhiwei, 2023. "The informational feedback effect of stock prices on corporate investments: A comparison of new energy firms and traditional energy firms in China," Energy Economics, Elsevier, vol. 127(PA).
    19. Yang, Baochen & An, Haokai & Song, Xinyu, 2024. "Oil price uncertainty and corporate inefficient investment: Evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 70(C).
    20. Miao Xia & Wei Shi & Fulin Wang, 2024. "Impact of Leader’s Goal Framing on Followership Behavior: The Role of Work Meaning and Power Dependence," Sustainability, MDPI, vol. 16(5), pages 1-19, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palcom:v:10:y:2023:i:1:d:10.1057_s41599-023-02107-w. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: https://www.nature.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.