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Why do state owned enterprises over-invest?Government intervention or managerial entrenchment. Created by Jan Bai

By: Contributor(s): Material type: TextTextSeries: China journal of accounting studies ; Volume 1 , number 3-4 ,Oxon: Taylor and Francis, 2013Content type:
  • text
Media type:
  • unmediated
Carrier type:
  • volume
Subject(s): Online resources: Summary: In a transition economy, corporate investment decisions are affected not only by managerial discretion, but also by government intervention. Using the data of publicly listed state-owned enterprises (SOEs) in China, we investigate how government intervention and corporate managerial entrenchment affect over-investment. The results show that both the policy burden from government intervention and rent-seeking due to managerial entrenchment can lead to over-investments, and these two effects appear to be complementary to each other. With a weak government intervention, managerial discretion is greater and management behavior tends toward opportunism.
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Item type Current library Call number Vol info Copy number Status Notes Date due Barcode
Journal Article Journal Article Main Library - Special Collections HF5601 CHI (Browse shelf(Opens below)) vol1,no 3-4,pages 236 SP18461 Not for loan For in-house use only

In a transition economy, corporate investment decisions are affected not only by managerial discretion, but also by government intervention. Using the data of publicly listed state-owned enterprises (SOEs) in China, we investigate how government intervention and corporate managerial entrenchment affect over-investment. The results show that both the policy burden from government intervention and rent-seeking due to managerial entrenchment can lead to over-investments, and these two effects appear to be complementary to each other. With a weak government intervention, managerial discretion is greater and management behavior tends toward opportunism.

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