Complementary effect of regulatory environment and accounting conservatism on investment efficiency

摘要

This paper analyses the impact of regulatory environments and accounting conservatism on the investment efficiency of Chinese listed firms for the period of 2007–2011. Unlike the existing studies which neglect the combined effect of regulatory environments and accounting conservatism on investment efficiency, this study figures out whether complementary or alternative effect regulatory environments and accounting conservatism have on the investment efficiency. Results show that in the case of insufficient investment, regulatory environments and accounting conservatism improve the investment efficiency respectively, and when interacting, regulatory environments enlarge the effect of accounting conservatism complementarily.