Insider Ownership and Investment Efficiency

IF 3.7 3区经济学 Q2 BUSINESS, FINANCE

International Journal of Finance & Economics Pub Date : 2026-07-17 Epub Date: 2025-10-15 DOI:10.1002/ijfe.70084

Bibek Bhatta

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Abstract

This study examines the relationship between insider ownership and investment efficiency in Indian publicly listed firms, utilising panel data spanning 2001 to 2015. It explores how agency conflicts contribute to suboptimal capital investment decisions. Our analysis reveals that increased insider ownership is associated with reduced investment efficiency, primarily due to tendencies towards overinvestment rather than underinvestment. This pattern suggests that insiders may favour personal or empire-building interests over shareholder value maximisation. Notably, the presence of independent directors on the board serves as a significant counterbalance, mitigating these inefficiencies. These findings hold when tested with different metrics for capital investment and investment opportunities. This research contributes to the literature by detailing the complex influence of ownership structure on investment behaviour and underscores the critical role of governance mechanisms, particularly board independence, in aligning investments with value creation. The insights are especially pertinent for developing economies with similar investor protection frameworks.

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内部人持股与投资效率

本研究利用2001年至2015年的面板数据，考察了印度上市公司内部人所有权与投资效率之间的关系。它探讨了代理冲突如何导致次优资本投资决策。我们的分析表明，内部人所有权的增加与投资效率的降低有关，这主要是由于过度投资而不是投资不足的趋势。这种模式表明，内部人士可能更倾向于个人利益或帝国建设利益，而不是股东价值最大化。值得注意的是，董事会中独立董事的存在起到了重要的平衡作用，减轻了这些低效率。当用不同的资本投资和投资机会指标进行测试时，这些发现是成立的。本研究通过详细说明所有权结构对投资行为的复杂影响，并强调治理机制，特别是董事会独立性，在使投资与价值创造保持一致方面的关键作用，从而为文献做出了贡献。这些见解尤其适用于拥有类似投资者保护框架的发展中经济体。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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