Comovement in Investment

Knyazeva, Anzhela; Knyazeva, Diana; Mørck, Randall; Yeung, Bernard

doi:10.2139/ssrn.1017323

Cited by 14 publications

(15 citation statements)

References 7 publications

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“…This indicates that companies are gaining more independence in their investment decisions. Our regional‐level empirical analysis uses a regional‐industry‐time measure similar to that of Knyazeva et al () and suggests that government intervention is positively and significantly associated with investment comovement, supporting our first premise that government intervention impacts investment comovement. We also confirm this finding through our firm‐level analysis that is based on the change in firm‐level investment in response to the change in industry‐level investment.…”

Section: Introductionsupporting

confidence: 79%

“…Knyazeva et al () report that investment comovement has a negative impact on firm and industry performance. Fan, Wong and Zhang () argue that government intervention could negatively impact corporate performance .…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…The industry‐level investment opportunity and the ease of excess capital disposal could also impact investment comovement among firms in the same industry (e.g., Guiso and Parigi, ). In a recent study, Knyazeva et al () show that agency conflicts, information asymmetries and property rights protection impact the propensity of firms to comove in investment decisions. This creates inefficiencies in capital allocation, and consequently, leads to declining financial performance.…”

Section: Introductionmentioning

confidence: 99%

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Government Intervention and Investment Comovement: Chinese Evidence

Chen¹,

Khan²,

Yu³

et al. 2013

Business Fin & Account

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This study examines whether government intervention affects corporate investment comovement, and whether this impact varies across firms with different types of ownership. We use a large Chinese sample to investigate these questions, and perform a regional as well as firmlevel analysis. We show that government intervention is positively and significantly associated with investment comovement. We also find that the impact of government intervention on investment comovement is higher and more significant for state-owned firms than for domestic private and foreign firms. Finally, we show that investment comovement hinders corporate performance for state-owned and domestic private firms but not for foreign firms.

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Section: Introductionsupporting

confidence: 79%

Section: Literature Review and Hypothesesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Government Intervention and Investment Comovement: Chinese Evidence

Chen¹,

Khan²,

Yu³

et al. 2013

Business Fin & Account

View full text Add to dashboard Cite

show abstract

“…Knyazeva, Knyazeva, Morck, and Yeung (2008) find empirical evidence supporting the hypothesis of managerial shirking in information acquisition. Their results show that managers base their investments on industrylevel information that is publicly available as well as on the observable actions of other firms.…”

Section: Managerial Lazinesssupporting

confidence: 52%

“…Malmendier and Tate (2005) find that the number of outside directors who are currently CEOs in other companies has a weak negative effect on investment cash flow sensitivity. Knyazeva et al (2008) test the hypothesis that managers shirk with regard to information acquisition. The hypothesis suggests that managers rely on public information rather than on firm-specific private information about investment opportunities when making investment decisions, leading to comovement in investment.…”

Section: The Board Of Directorsmentioning

confidence: 99%