Using the split-share structure reform in China, we examine the effect of stock liquidity on investment efficiency. We find that enhanced stock liquidity leads to more efficient investment and the effect is much more pronounced for under-investing firms compared to over-investing firms. We also...

This study investigates whether economic policy uncertainty (EPU) magnifies peer effects in corporate investment in China. Through use of the peer-firm-average idiosyncratic stock return to capture exogenous variation in peer firms' investment activities, we show that peer effects are stronger...

Using two quasi-natural experiments in China, we examine the effect of stock liquidity on investment efficiency. We find that enhanced stock liquidity leads to more efficient investment and the effect is much more pronounced for under-investing firms compared to over-investing firms. In...

Using the split-share structure reform in China as a quasi-natural experiment, we examine the effect of stock liquidity on investment efficiency. Consistent with feedback and incentive theories, investment efficiency increases after the reform but only for under-investing firms. Higher stock...

We investigate whether the index reconstitutions of the China Securities Index (CSI) are suitable as a quasi-natural experiment to investigate the effect of institutional ownership on corporate policies. Using both actual and predicted index constituents, we document a sharp discontinuity in...