Free cash flows and overinvestment: Further evidence from Chinese energy firms

被引：42
|
作者：
Zhang, Dayong [1 ]
Cao, Hong [2 ]
Dickinson, David G. [3 ]
Kutan, Ali M. [4 ,5 ]
机构：
[1] Southwestern Univ Finance & Econ, Chengdu, Sichuan, Peoples R China
[2] Beijing Inst Technol, Sch Management & Econ, Beijing, Peoples R China
[3] Univ Birmingham, Dept Econ, Birmingham B15 2TT, W Midlands, England
[4] Southern Illinois Univ, Dept Econ & Finance, Edwardsville, IL 62026 USA
[5] Borsa Istanbul, Istanbul, Turkey
来源：
ENERGY ECONOMICS | 2016年 / 58卷
关键词：
Free cash flow; Energy firms; Fundamental Q; Dynamic panel data model; Panel VAR; OIL PRICE SHOCKS; OWNERSHIP STRUCTURE; STOCK-MARKET; ECONOMIC-GROWTH; EXCHANGE-RATES; AGENCY COSTS; PANEL-DATA; INVESTMENT; RETURNS; CONSUMPTION;
D O I：
10.1016/j.eneco.2016.06.018
中图分类号：
F [经济];
学科分类号：
02 ;
摘要：
In the recent years, Chinese energy firms have accumulated significant free cash flows due to higher energy prices and government subsidies and also have invested heavily. An important empirical question is whether the Chinese energy firms tend to misallocate resources due to growing free cash flows. In this paper, we test whether they make some sub-optimal investment decisions following the well-established free cash flow problem in the finance literature, originally identified by Jensen (1986) for the US oil sector. Using a dynamic panel model for the period 2001-2012 for the Chinese energy-related public listed firms, we find evidence supporting the free cash flow hypothesis, suggesting overinvestment problems in the Chinese energy sector. In addition, we observe that firm size and corporate governance structure are important determinants of the Chinese energy firms' investment decisions. (C) 2016 Published by Elsevier B.V.
引用
收藏
页码：116 / 124
页数：9
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