Essays on firm performance and investment efficiency

Bao, Minghao (2025) Essays on firm performance and investment efficiency. PhD thesis, University of Glasgow.

Abstract

The thesis comprises three independent essays on various aspects of corporate finance. The first essay focus on the impact of regional foreign investment on Chinese domestic mergers and acquisitions (M&As). The second essay examines the relationship between corporate social responsibility (CSR) and export performance in the United States. The third essay explores the influence of corporate reputational risk on firms’ investment inefficiency in the United States. The introduction provides a brief overview of the background, and the conclusion summarizes the main findings across the three chapters.

The first empirical study (Chapter 2) investigates the impact of regional foreign investment on domestic mergers and acquisitions in China during the period between 2011 and 2019. First, the empirical results indicate that the regional foreign investment exerts no significant effect on firms’ short-term stock performance surrounding M&A announcements. Second, this study aims to explore the moderating role of regional corporate income tax and stateowned enterprises (SOEs) in the relationship between regional foreign investment and firms’ short-term stock performance after mergers and acquisitions. The findings indicate that regional corporate income tax plays a partially negative moderating role in the relationship between regional foreign investment and short-term M&A stock performance. However, there is no evidence that state-owned enterprises status of acquiring firms exerts any significant moderating influence in this relationship. Furthermore, the analysis provides limited support for the view that the foreign investment in China’s western region may have a positive impact on firms’ short-term M&A stock performance. Finally, the study reveals that regional foreign investment fails to have a statistically significant impact on the number of M&A transactions.

The second empirical study (Chapter 3) examines the effect of corporate social responsibility on firm export sales, utilizing a panel of U.S. firms over the period from 1995 to 2013. First, the results demonstrate that corporate social responsibility has a positive and significant impact on export sales. Second, the study also aims to explore the moderating role of financial constraints and firm location in the effects of corporate social responsibility on firm export sales. The study indicates that neither financial constraints nor firm location have a significant moderating effect on the relationship between CSR and export sales. Moreover, the findings reveal that state-level GDP per capita has a positive and statistically significant moderating effect on the relationship between CSR and export sales to some extent. Finally, the results also reveal that CSR strength is positively associated with corporate export sales to a certain extent, while CSR concern exerts a detrimental effect. Furthermore, CSR related to employee, diversity and product aspects significantly enhance a company’s export sales to some degree.

The final empirical study (Chapter 4) assesses the impact of a firm’s reputational risk on corporate investment inefficiency. This chapter analyzes a dataset consisting of 3602 firmyear observations from 588 distinct U.S. firms spanning from 2007 to 2020. The results reveal that reputational risk significantly and positively affects corporate investment inefficiency. Then, the findings indicate that while reputational risk increases overinvestment, it does not have a considerable effect on underinvestment. Moreover, reputational risk positively impacts investment inefficiency across firms of varying levels of reputational risk and sizes. Notably, firms with low reputational risk and larger firms experience greater adverse effects. In addition, reputational risk does not significantly affect either overinvestment or underinvestment in both large and small firms. Furthermore, this chapter also demonstrates that social and governance-related reputational risk positively affect corporate investment inefficiency, whereas environmental reputational risk does not exert a significant influence. Additionally, the analysis further reveals that financial constraints do not have a significant moderating effect on the relationship between reputational risk and corporate investment inefficiency.

• Item Type: Thesis (PhD)
• Qualification Level: Doctoral
• Subjects: H Social Sciences > HG Finance
• Colleges/Schools: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Supervisor's Name: Kazakis, Dr. Pantelis, Karavitis, Dr. Panagiotis and Tsoukas, Professor Serafeim
• Date of Award: 2025
• Depositing User: Theses Team
• Unique ID: glathesis:2025-85603
• Copyright: Copyright of this thesis is held by the author.
• Date Deposited: 21 Nov 2025 16:43
• Last Modified: 21 Nov 2025 16:43
• Thesis DOI: 10.5525/gla.thesis.85603
• URI: https://theses.gla.ac.uk/id/eprint/85603