Ownership Concentration, Financial Leverage and Inefficient Investment-evidence from Chinese A-share Market

Zhang Xinyuan, Bao Nan, Zhao Yufei

Abstract


This paper analyzes the data from Chinese A-share market during 2 years from 2014 to 2015. Basing on 2297 listed firms, we use theoretical analysis and empirical analysis to explore and validate the relationship between ownership concentration, financial leverage and the company's inefficient investment behavior. The result shows that in Chinese A-share market, financial leverage can effectively inhibit the company's inefficient investment behavior; the concentration of equity will effectively inhibit the company's inefficient investment behavior.


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DOI: https://doi.org/10.11114/afa.v3i2.2478

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Paper Submission E-mail: afa@redfame.com

Applied Finance and Accounting (AFA)        

ISSN 2374-2410(Print)           ISSN 2374-2429(Online)

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