What Drives Fixed Asset Holding and Risk-Adjusted Performance of Corporates in China? An Empirical Analysis

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Original languageEnglish
Pages (from-to)141-164
Journal / PublicationInternational Real Estate Review
Issue number2
Publication statusPublished - 1 Jun 2012


This paper attempts to shed light on the over-investment debate by investigating listed firms in China. Firms with a higher level of fixed asset holding and overhead expenses, and covered by preferential tax policies in China are found to be associated with lower risk-adjusted performance. In addition, the preferential tax policies encourage fixed asset investment. In contrast to some of the previous literature, state-ownership of firms, dividend policies, and ownership concentration are not robust predictors of risk-adjusted performance, and debt level, managerial shareholding, and profit per unit of asset are not robust predictors of fixed asset investments.

Research Area(s)

  • Corporate real estate, Fixed asset holding, Over-investment theory, State-ownership, Tax-favor policy

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