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dc.contributor.authorAlhadi, A.
dc.contributor.authorEulaiwi, Baban
dc.contributor.authorTaylor, G.
dc.contributor.authorAl-Yahyaee, K.
dc.identifier.citationAlhadi, A. and Eulaiwi, B. and Taylor, G. and Al-Yahyaee, K. 2017. Investment Committee Characteristics and Investment Efficiency.

This study investigates the association between existence of a board investment committee and that committee’s characteristics and corporate investment efficiency. Using a sample of industrial firms from six Gulf Cooperation Council (GCC) countries over the 2005–2013 period, we find that the existence of an investment committee reduces both under- and over-investment by these firms. We also find that financial expertise of committee members positively affects firms’ investment efficiency. These findings are consistent with the assertion that a board investment committee assists with the monitoring and control of firms’ investments. We also find that the existence of an investment committee is likely to reduce over- and under-investment in firms with high levels of foreign ownership concentration. The tenets of agency theory suggest that the existence of an investment committee aligns a firm’s investment activities with the objective of shareholder wealth maximization. These results are robust to a battery of additional tests that use alternative measures of investment efficiency and tests relating to self-selection bias and endogeneity.

dc.titleInvestment Committee Characteristics and Investment Efficiency
dc.typeJournal Article
curtin.departmentSchool of Accounting
curtin.accessStatusFulltext not available

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