How does analysts' forecast quality relate to corporate investment efficiency?

Chen, Tao; Xie, Lingmin; Zhang, Yuanyuan

doi:10.1016/j.jcorpfin.2016.12.010

Cited by 129 publications

(75 citation statements)

References 83 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Thus, the amount of politically connected companies in the sample was quite stable over the considered period: 29% on average. That aligns with the data collected by other researchers on a sample of companies from Russia and 63% of other countries (Table 3) [7,21]. The largest share of connected firms was evident in 2010 and the lowest share in 2013.…”

Section: Higher School Of Economicssupporting

confidence: 90%

See 1 more Smart Citation

Do Political Connections Influence Investment Efficiency in Russian Companies?

Cherkasova¹,

Иванова²

2019

КФ

View full text Add to dashboard Cite

The question as to whether political influence can benefit the commercial activity of companies, and the relatedquestions surrounding political corruption that arise, are of perennial fascination for persons at every level of societyand in every country. With this in mind, this article seeks to explore the relationship between political connections incommercial firms and investment efficiency. This relationship will be studied on an empirical basis, and will shed somelight on the actual parameters, mechanisms, and effects of political influence in the business sphere in the RussianFederation.In this research, we consider only direct relations between business operators and the members of Russian ministries,councils, political parties, heads of the regions and cities. These relationships are categorised as being politicallyinfluential depending on the status of the politician, and whether they are active at a federal, regional or municipallevel. Connections with such politicians are examined where there is evidence of direct links with company CEOs andchairmen of the boards of directors of companies.This research is carried out on the sample of 106 Russian non-financial companies for the period 2010–2015. 44companies from the final sample were considered as politically connected on at least one level. Some firms haveconnections more than at one level (11 companies). Companies have politically connected chairman of the board (36companies) more often than connected CEO (26 companies). Using regression analysis, we determined whether thepolitical ties in Russia have a positive or a negative impact on the investment expenditures of companies.Interestingly, and perhaps contrary to popular belief, we identified a negative relationship between political ties and theefficiency of investment decisions for individual companies. The presence of politically-connected CEOs at federal andregional levels is seen to have a significant negative impact on investment efficiency. However, our results also indicatethat the presence of politically-connected chairmen of the board which are active at the municipal level is correlatedwith efficient investment activity. This indicates that political influence at this level may be responsible for more prudentrecommendations regarding commercial and investment decisions. Overall, it can be seen that in this sample ofcompanies from the Russian Federation, the presence of state-tied representatives may be aligned with a tendency forcompanies to follow targets that are favourable for its government connections and not for the firm itself.Although political connections have a mixed impact on the company’s value, the relation with investment efficiency isprimarily negative. Thus, we may reason that the government has a strong power over politically-related companies.Such influences are linked with a tendency for companies to deviate from their primary goal of value maximisation.These results may indicate the influence of undue pressure from a government which strives to reach its own goalsthrough the mechanism of commercial activity, or perhaps the opportunistic behaviour of individuals in managementpositions who are motivated towards personal political gain at the expense of the company. Political connections have amixed effect on the company’s performance and investment efficiency, and we postulate that firms establish relationshipswith government officials pursuing the goal to obtain more advantageous position. The links between political operatorsand business activity demonstrated in this research undoubtedly highlight some uncomfortable areas of discourse inthe commercial sphere. On a granular level, further research into specific transactions and motivations may seem morea research area for journalists or law enforcement investigators, but this may be simply a popular prejudice. There iscertainly ample opportunity for expanding the scope of this study’s results. Beyond the interests of political, sociologicaland legal researchers, the data presented herein will be of immediate interest to persons operating in the commercial,business, and economic spheres of the Russian Federation and internationally.

show abstract

Section: Higher School Of Economicssupporting

confidence: 90%

“…Further, there are mixed results regarding the influence of the firm's size on its investments. On the one hand, small companies often suffer from financial constraints that reduce their ability to invest [7,30]. On the other hand, mature firms have sufficient funds to make preferable financial decisions [6].…”

Section: Methodsmentioning

confidence: 99%

Do Political Connections Influence Investment Efficiency in Russian Companies?

Cherkasova¹,

Иванова²

2019

КФ

View full text Add to dashboard Cite

show abstract

“…Firms of higher age tend to invest less because they are normally at the mature age of development. This variable is widely used as a control variable in previous papers (Biddle et al ; Chen et al ). Finally, ε i , t is the error term.…”

Section: Model and Datamentioning

confidence: 99%

“…• SIZE is a proxy for firm size, which is the natural logarithm of the book value of the firm's real total assets. This variable is commonly used as a control variable in previous studies (Malmendier and Tate 2005;Biddle et al 2009;Chen et al 2017b). Large firms are more diversified.…”

Section: Model and Data Modelmentioning

confidence: 99%

Residual government ownership and corporate investment efficiency in privatised firms: evidence from a transition country

2019

Asian-Pac Economic Lit

View full text Add to dashboard Cite

This paper delves into the link between residual government ownership and investment efficiency in privatised firms in a transitional economy. The study uses a data set covering firms listed on the Ho Chi Minh City stock exchange, Vietnam, over the period from 2007 to 2015. It is found that firms with higher residual government ownership are associated with lower levels of investment efficiency. The finding suggests that government ownership is less beneficial than private ownership in privatised firms. The paper has important implications for policymakers in supporting privatisation policy and in designing a framework to promote better corporate governance in privatised firms after privatisation.

show abstract

“…The 2013-2016 study focused on the impact of earnings management and agency issues on corporate investment efficiency, and found that compared to previous studies on the impact of corporate traits or behavior on firm investment efficiency, this period of time is a modular process for earnings. There are many ways to manage, mainly focusing on the impact of the module of earnings management on corporate investment efficiency, such as accounting information quality, internal control [17] , and accounting conservatism [18] . In 2016-2018, it is mainly used to improve production efficiency, environmental issues and SME methods.…”

Section: Fig 6 Keyword Timeline Analysis Extracted By Wosmentioning

confidence: 99%

Investment Efficiency Research Theme Changes and Development Trends on the basis of CiteSpace

Ye¹

2018

Proceedings of the 2018 2nd International Conference on Economic Development and Education Management (ICEDEM 2018)

View full text Add to dashboard Cite

In order to systematically understand the field of enterprise investment efficiency, this paper analyzes the trend of the development of investment efficiency in the enterprise over time, establishes a cross-sectional research direction and a vertical timeline system, and combines the economic background and research status to make scientific predictions on future development trends. This paper selects "CNKI" and "web of science" as the literature search engine in 2003-2018, and uses the tool (CiteSpace) to cluster and analyze the data, showing the relationship between knowledge structure, main research institutions and evolution law of enterprise investment efficiency. The research results show that the research path of domestic and foreign investment efficiency is different. The domestic undergoes the process from the micro-features of enterprises to the combination of macro-economy. Foreign countries are cutting from macroeconomics and industry factors, gradually combining the micro-features of enterprises, and changing with time. There is a clear trend in research direction. The future development direction of enterprise investment efficiency mainly focuses on the combination of micro-characteristics with economic environment and policies, the commitment of social responsibility, and the influence of market participants' behaviors and emotions on corporate investment efficiency. This research combs the development of research on investment efficiency in domestic and foreign enterprises, and provides a directional reference for the future development of this field.

show abstract

How does analysts' forecast quality relate to corporate investment efficiency?

Cited by 129 publications

References 83 publications

Do Political Connections Influence Investment Efficiency in Russian Companies?

Do Political Connections Influence Investment Efficiency in Russian Companies?

Residual government ownership and corporate investment efficiency in privatised firms: evidence from a transition country

Investment Efficiency Research Theme Changes and Development Trends on the basis of CiteSpace

Contact Info

Product

Resources

About