Sampling on Chinese A-listed firms from 2007 to 2015, and collecting EMBA background information of chairmen of the board by programming Python in Chinese listed companies’annual report and university websites, we examine the relationship between the EMBA background of chairmen of the board and the efficiency of investment. The results show that the EMBA background of chairmen of the board really reflects in relieving the lack of investment in enterprises, but in promoting overinvestment. This conclusion is still established after using the Instrument Variable, Heckman, PSM and Placebo test to control the possible endogenous problems. Sub-sample test shows that the effect of the EMBA background of chairmen of the board on the efficiency of investment only exists in the chairman group that lacks knowledge reserves and social relation networks, which proves that elite education affects the efficiency of investment by improving managers’decision-making ability and constructing a" classmate circle”. Finally, considering the" famous school”effect of EMBA program, we find that the EMBA provided by famous universities can alleviate the investment shortage of enterprises, but it will not lead to excessive investment, rather than a famous school project. The results of this paper enrich the relevant literature of Upper Echelon Theory, and expound the impact of the educational background of chairmen of the board on the efficiency of investment from the perspective of EMBA program experience with the educational property and social relation networks. Through the systematic training of EMBA program, chairmen of the board could enhance the structure of their own knowledge, improve their ability and level of decision-making under the information asymmetry, and extend their network in the" classmate circle”. Moreover, it helps to understand the investment efficiency of enterprises under the condition of the imperfect formal system in Chinese markets, and the results also provide empirical references for regulators to establish a perfect construction system. In addition, this paper enriches the research contents of individual characteristics of executives, and provides empirical support for educational management departments to formulate EMBA education related policies.
Are Chairmen of the Board with EMBA Background Better in Investment? An Empirical Test from the Perspective of Investment Efficiency of Chinese Listed Companies
Foreign Economics & Management Vol. 41, Issue 02, pp. 99 - 111 (2019) DOI:10.16538/j.cnki.fem.2019.02.008
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Cite this article
Yu Wei, Chen Qiuping, Li Mengdan. Are Chairmen of the Board with EMBA Background Better in Investment? An Empirical Test from the Perspective of Investment Efficiency of Chinese Listed Companies[J]. Foreign Economics & Management, 2019, 41(2): 99-111.