Investment efficiency of chemical companies in china: estimation and determinants

The efficiency of investment has been a crucial issue for chemical companies in China to improve their competitive advantage. A theoretical framework was developed to account for how the efficiency of investment is determined and examined empirically utilizing 131 listed chemical companies in China from 2011 to 2015. The Data Envelopment Analysis (DEA) method was employed to estimate the efficiency of investment. Results show that the efficiency of investment dropped and the majority of chemical companies experienced increasing deviation from the optimal frontier efficiency. The empirical evidence indicates that the corporate share as controlling shareholder in the governance structure leads to the decreasing efficiency of investment but the concentration of ownership and long tenure in the stock market contribute positively to the investment efficiency.