Employee Quality, Internal Information and Corporate Investment Efficiency: Firm Level Evidence

42 Pages Posted: 23 Jan 2021

See all articles by Yige Jin

Yige Jin

Xi'an Jiaotong University (XJTU); City University of Hong Kong

Xing Li

City University of Hong Kong; Xi'an Jiaotong University

Gaoliang Tian

Xi'an Jiaotong University (XJTU)

Date Written: December 2019

Abstract

This study investigates the association between the quality of the entire workforces and corporate investment efficiency. We find that the superior internal information generated and collected by high quality employees can enhance managerial investment efficiency. This association is more pronounced in highly complicated firms, firms with more managerial shareholding or firms with higher board independence. The instrumental variable estimations help us establish a causal link between employee quality and investment efficiency. Finally, the validation tests show that firms operated by high-quality employees perform a more effective internal control system, and disclose high quality accounting reports, suggesting that the quality of internal information is indeed higher in these firms.

Suggested Citation

Jin, Yige and Li, Xing and Tian, Gaoliang, Employee Quality, Internal Information and Corporate Investment Efficiency: Firm Level Evidence (December 2019). Available at SSRN: https://ssrn.com/abstract=3729988 or http://dx.doi.org/10.2139/ssrn.3729988

Yige Jin (Contact Author)

Xi'an Jiaotong University (XJTU) ( email )

26 Xianning W Rd.
Xi'an Jiao Tong University
Xi'an, Shaanxi 710049
China

City University of Hong Kong ( email )

Centre for Applied One Health Research and Policy
Hong Kong

Xing Li

City University of Hong Kong ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

Xi'an Jiaotong University ( email )

XI AN, SHANNXI
China

Gaoliang Tian

Xi'an Jiaotong University (XJTU) ( email )

26 Xianning W Rd.
Xi'an Jiao Tong University
Xi'an, Shaanxi 710049
China

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