یکپارچگی دولت و بهره وری سرمایه گذاری
Abstract
1- Introduction
2- Literature review
3- Theoretical analysis and hypotheses
4- Research design and data source
5- Empirical test and analysis
6- Conclusions
References
Abstract
We explore the relation between government integrity and firms’ investment efficiency in the context of China’s deepening reforms and its strengthening the social credit system. We find that government integrity is positively associated with the investment efficiency of listed companies in China. Government integrity is negatively related to corporate underinvestment, but insignificantly related to corporate overinvestment. Higher government integrity reduces underinvestment in non-state-owned firms, but this relation is not significant in state-owned firms. Furthermore, we find that the negative relation between government integrity and underinvestment is only significant for firms in industries that receive supportive government policies. This study enriches research on corporate investment by adopting the perspective of government integrity, and supplements the literature on government integrity and its economic consequences. Our study also provides micro-level empirical evidence that strengthening government integrity will promote the economic transformation of China.
Introduction
In recent years, as China has developed economically, integrity has become increasingly important in the social value system and of increasing interest to researchers and policy makers. The report of the Eighteenth National Congress of the Communist Party of China (CPC) points out that education and governance are needed to address serious ethical problems, and that it is essential to enhance government integrity, business integrity, social integrity and judiciary credibility. In addition, the Third Plenary Session of the Eighteenth CPC Central Committee called on the public and government to establish a sound social credit system to encourage ethical behavior, punish dishonesty, promote the transformation of government, greatly reduce administrative examination and approval, make government’s decision-making more reasonable, and strive for a transparent government. Chinese Premier Keqiang Li emphasized in the State Council Executive Meeting that ‘‘a promise is a promise for the government.” It is important for the government to keep its word, because foreign investors and citizens will choose to invest in local areas only if they believe in the government’s policies and regard the government as trustworthy (Zhang, 2015). A government with integrity contributes to a good investment environment, which is essential for local economic development. To optimize the investment environment for private capital investment, the Chinese government has focused on speeding up the transformation of government function and on improving the efficiency of government operations; however, several problems still exist. For example, some of the government’s policies are opaque or change frequently, and favorable promises made by the government are not always fulfilled. These problems threaten the government’s image, and make enterprises less enthusiastic about investments.