Analysis of the impact of inefficient investment on stock liquidity
WANG Zhiwei
ZHAO Jian
XU Wendi
Abstract：This article takes Shanghai and Shenzhen A-share listed companies from 2007 to 2022 as research samples,and theoretically analyzes and empirically tests the impact of inefficient investment on the stock liquidity of companies.The empirical results show that inefficient investment significantly reduces the stock liquidity of enterprises,both underinvestment and overinvestment in inefficient investments significantly reduce the liquidity of corporate stocks.After considering the heterogeneity differences of enterprises,it is found that inefficient investment has a more significant effect on reducing stock liquidity in non high-tech enterprises,enterprises with low internal control levels and low information transparency.The mechanism analysis reveals that there are several ways that the inefficiency investment can affect the liquidity of enterprise stock,such as increasing financing constraints,increasing risk of enterprise debt default,reducing production efficiency,and increasing stock return volatility.Policies should further guide enterprises to improve investment efficiency,thereby effectively promoting the increase of stock liquidity.
Keywords：inefficient investmentstock liquidityenterprise heterogeneity
Publication Date：2024-12-25
Online Publishing Date：2025-08-15(First online date of this platform, not the publication date of the document)
Pages：6( 75-80 )