The impact of executive characteristics on investment strategy efficiency: Evidence from Chinese A-share listed firms

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Abstract

Investment efficiency is a key parameter in modern business as it reflects the optimisation of capital in ventures taken up by a firm through positive net present value. However, in recent times, it has been understood that Chinese firms have shown traits of underinvestment or overinvestment (Guariglia & Yang, 2016; Gao et al., 2025). This leads to investment inefficiency and a loss in revenue for such firms. As a result, it is necessary to understand the factors responsible for such inefficiencies. The research also used artificial intelligence (AI) adoption as a mediating role in shaping capital allocation efficiency. Using an unbalanced panel dataset of 3773 firms from 2009 to 2023 (27790 firm-year observations), a fixed effects model was used as a baseline model and two-stage least squares (2SLS) regression as a robustness check to address potential endogeneity. The results indicate that chief executive officer (CEO) age has a statistically significant negative effect on investment efficiency, meaning that older CEOs are associated with higher investment efficiency, while overseas experience and academic qualifications do not exert a consistent influence. Additionally, AI adoption also mediates the executive-investment relationship significantly. These results have important implications for corporate governance, strategic leadership, and AI investment strategies in emerging markets.

Keywords: Investment Efficiency, Executive Characteristics, Artificial Intelligence, Corporate Governance, Chinese A-listed Firms

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: G30, M12, O33

Received: 31.07.2025
Revised: 24.11.2025; 13.01.2026
Accepted: 30.01.2026
Published online: 02.02.2026

How to cite this paper: Wen, Y. (2026). The impact of executive characteristics on investment strategy efficiency: Evidence from Chinese A-share listed firms. Corporate and Business Strategy Review, 7(1), 239–249. https://doi.org/10.22495/cbsrv7i1art21