Title

Financial slack, institutional shareholding and enterprise innovation investment: evidence from China

Publication Name

Accounting and Finance

Abstract

This study examines how institutional shareholding affects the relationship between financial slack and corporate investment in innovation for Chinese A-share listed companies. We find that financial slack significantly increases corporate innovation investment. Pressure-resistant institutions do not moderate the relation but pressure-sensitive institutions do moderate the relation negatively. We further find that financial slack affects beneficially results because of the employment of slack resources after an exogenous negative shock like COVID-19/Global Financial Crisis. Our findings contribute to the literature on the cross-sectional variation on the relationship between companies’ strategies and accounting choices in China.

Open Access Status

This publication is not available as open access

Volume

61

Issue

2

First Page

3235

Last Page

3259

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Link to publisher version (DOI)

http://dx.doi.org/10.1111/acfi.12700