Financial Expert CEOs, Political Influence and Corporate Investment Decisions: Evidence from China

This study examines the impact of financial expert CEOs on corporate investment decisions in Chinese listed firms. We find that expertise CEOs are associated with higher investment expenditure and tend to overinvest. The results indicate that CEOs’ working experience matters to firms’ investment decision-making. In addition, political influence shapes the impact of expertise CEOs on investment decisions. Financial expert CEOs are associated with higher investment efficiency in State-owned enterprises (SOEs) but not in private firms, suggesting SOEs may benefit from hiring expertise CEOs. We find financial expert CEOs invest more on intangible assets in private firms but less in SOEs. Furthermore, the anti-corruption campaign initiated by President Xi reduces overinvestment and promotes innovation activities.