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Financial experts on the top management team: Do they reduce investment inefficiency?

Research output: Contribution to Journal/Magazine › Journal article › peer-review

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Financial experts on the top management team: Do they reduce investment inefficiency? / Li, Zhe; Pryshchepa, Oksana; Wang, Bo.
In: Journal of Business Finance and Accounting, Vol. 50, No. 1-2, 07.02.2023, p. 198-235.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Li, Z, Pryshchepa, O & Wang, B 2023, 'Financial experts on the top management team: Do they reduce investment inefficiency?', Journal of Business Finance and Accounting, vol. 50, no. 1-2, pp. 198-235. https://doi.org/10.1111/jbfa.12575

APA

Li, Z., Pryshchepa, O., & Wang, B. (2023). Financial experts on the top management team: Do they reduce investment inefficiency? Journal of Business Finance and Accounting, 50(1-2), 198-235. https://doi.org/10.1111/jbfa.12575

Vancouver

Li Z, Pryshchepa O, Wang B. Financial experts on the top management team: Do they reduce investment inefficiency? Journal of Business Finance and Accounting. 2023 Feb 7;50(1-2):198-235. Epub 2021 Dec 8. doi: 10.1111/jbfa.12575

Author

Li, Zhe ; Pryshchepa, Oksana ; Wang, Bo. / Financial experts on the top management team : Do they reduce investment inefficiency?. In: Journal of Business Finance and Accounting. 2023 ; Vol. 50, No. 1-2. pp. 198-235.

Bibtex

@article{14b898fd8bae4f28961306f188eb04a4,
title = "Financial experts on the top management team: Do they reduce investment inefficiency?",
abstract = "We examine the effect of the top management team (TMT) professional finance experience on firm investment efficiency. Top managers with a career background in finance help reduce deviations of investment from the level warranted by firm fundamentals. Reductions in investment inefficiencies are achieved by financial expert managers using project-specific rather than company-wide, discount rates for project evaluation and facilitating debt and equity issuance at lower costs. Greater investment efficiency due to the financial expertise of TMT improves firm performance. We demonstrate that these improvements are driven by the collective expertise of the TMT rather than solely by chief executive officers.",
keywords = "demographic characteristic, experience, financial expert, firm performance, investment efficiency, top management team",
author = "Zhe Li and Oksana Pryshchepa and Bo Wang",
year = "2023",
month = feb,
day = "7",
doi = "10.1111/jbfa.12575",
language = "English",
volume = "50",
pages = "198--235",
journal = "Journal of Business Finance and Accounting",
issn = "0306-686X",
publisher = "Wiley-Blackwell",
number = "1-2",

}

RIS

TY - JOUR

T1 - Financial experts on the top management team

T2 - Do they reduce investment inefficiency?

AU - Li, Zhe

AU - Pryshchepa, Oksana

AU - Wang, Bo

PY - 2023/2/7

Y1 - 2023/2/7

N2 - We examine the effect of the top management team (TMT) professional finance experience on firm investment efficiency. Top managers with a career background in finance help reduce deviations of investment from the level warranted by firm fundamentals. Reductions in investment inefficiencies are achieved by financial expert managers using project-specific rather than company-wide, discount rates for project evaluation and facilitating debt and equity issuance at lower costs. Greater investment efficiency due to the financial expertise of TMT improves firm performance. We demonstrate that these improvements are driven by the collective expertise of the TMT rather than solely by chief executive officers.

AB - We examine the effect of the top management team (TMT) professional finance experience on firm investment efficiency. Top managers with a career background in finance help reduce deviations of investment from the level warranted by firm fundamentals. Reductions in investment inefficiencies are achieved by financial expert managers using project-specific rather than company-wide, discount rates for project evaluation and facilitating debt and equity issuance at lower costs. Greater investment efficiency due to the financial expertise of TMT improves firm performance. We demonstrate that these improvements are driven by the collective expertise of the TMT rather than solely by chief executive officers.

KW - demographic characteristic

KW - experience

KW - financial expert

KW - firm performance

KW - investment efficiency

KW - top management team

U2 - 10.1111/jbfa.12575

DO - 10.1111/jbfa.12575

M3 - Journal article

VL - 50

SP - 198

EP - 235

JO - Journal of Business Finance and Accounting

JF - Journal of Business Finance and Accounting

SN - 0306-686X

IS - 1-2

ER -