The Differential Effects of Internal Control Teams on Investment Decision Making Based on Industry Competition

IF 2.1 Q2 BUSINESS, FINANCE International Journal of Financial Studies Pub Date : 2023-11-03 DOI:10.3390/ijfs11040131
Hyunjung Choi
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Abstract

This study investigates how a company’s internal control team affects their investment decision making, considering the level of industry competition within the South Korean capital market. A model obtained from the literature was employed to test the hypothesis. When industry competition is low, the quantitative adequacy of internal control staff increases the likelihood of investment when the risk of underinvestment is high, and it decreases the likelihood of investment when the risk of overinvestment is high. However, this is not the case when industry competition is fierce. Qualitative adequacy of internal control staff—expertise—has a significant effect on investment decision making when industry competition is high, but has no significant effect when industry competition is low. These results suggest that investors should consider the quantitative and qualitative adequacy of internal control staff along with the level of industry competition when evaluating the investment efficiency of a company.
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基于行业竞争的内部控制团队对投资决策的差异效应
本研究在考虑韩国资本市场行业竞争水平的情况下,探讨了公司内部控制团队如何影响其投资决策。采用从文献中获得的模型来检验假设。当行业竞争程度较低时,内部控制人员的数量充分性在投资不足风险高时增加了投资的可能性,在投资过度风险高时降低了投资的可能性。然而,当行业竞争激烈时,情况并非如此。内部控制人员的质性充分性——专业知识——在行业竞争高时对投资决策有显著影响,在行业竞争低时对投资决策没有显著影响。这些结果表明,投资者在评价公司投资效率时,应考虑内部控制人员的数量和质量是否充足以及行业竞争的程度。
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来源期刊
CiteScore
3.70
自引率
8.70%
发文量
100
审稿时长
11 weeks
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