Controlling Persons’ Foreign Residency Rights and Over-investment ——Evidence from China’s Private Listed Companies
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Abstract This paper takes the private listed companies controlled by natural persons in Shanghai and Shenzhen A shares from 2004 to 2018 as the study objects to test the impact of the actual controller’s right of abode abroad on over-investment. The study shows that the right of abode abroad aggravates the over-investment behavior of enterprises, and the free cash flow is the intermediary path of the influence of the right of abode abroad on over-investment. The test of regulatory effect shows that the separation of the two rights induces and strengthens the “tunneling” motivation of the actual controller, and the higher degree of separation of the two rights aggravates the impact of the right of abode abroad on over-investment. However, paying higher cash dividends can reduce the free cash flow of enterprises for over-investment, and the higher cash dividend policy alleviates the impact of overseas residence rights on over-investment.
LUO Changqin. Controlling Persons’ Foreign Residency Rights and Over-investment ——Evidence from China’s Private Listed Companies. Economic Survey, 2021, 38(5): 0111.
2021, Vol. 38 
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