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Institutional investors' corporate site visits and resource extraction: Evidence from China

Institutional investors' corporate site visits and resource extraction: Evidence from China This study examines the effect of corporate site visits on resource extraction. Taking advantage of China's mandatory disclosure of detailed investors' site visits information, we find that firms with more investors' site visits have lower levels of managerial private consumption and tunnelling. This association is more pronounced when the monitoring effect of corporate site visits is more efficient, and the agency problem is more severe. We utilise the two‐stage least squares (2SLS) estimation approach to demonstrate the robustness of our results. Collectively, our findings highlight the external monitoring role of investors' site visits in reducing corporate agency conflicts. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting and Finance Wiley

Institutional investors' corporate site visits and resource extraction: Evidence from China

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References (60)

Publisher
Wiley
Copyright
Accounting and Finance © 2023 AFAANZ
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/acfi.13104
Publisher site
See Article on Publisher Site

Abstract

This study examines the effect of corporate site visits on resource extraction. Taking advantage of China's mandatory disclosure of detailed investors' site visits information, we find that firms with more investors' site visits have lower levels of managerial private consumption and tunnelling. This association is more pronounced when the monitoring effect of corporate site visits is more efficient, and the agency problem is more severe. We utilise the two‐stage least squares (2SLS) estimation approach to demonstrate the robustness of our results. Collectively, our findings highlight the external monitoring role of investors' site visits in reducing corporate agency conflicts.

Journal

Accounting and FinanceWiley

Published: Dec 1, 2023

Keywords: Corporate governance; Corporate site visits; Information advantage; Monitoring effect; Resource extraction

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