http://doi.org/10.35668/2520-6524-2023-4-04
Li Yiyao — Student, Dongbei University of Economics and Finance, Str. Heishijiao, Dalian City, Liaoning Province, China; +86 15040274243; kesong_2021@qq.com
Chen Yuan — Associate Professor, Shenyang Ligong University, 6, Nanping Ave, Hunnan District, Shenyang City, Liaoning Province, China; 738236187@qq.com
STUDY OF EXCESSIVE INVESTMENTS: CONCEPTS AND MOTIVATIONS
Abstract. Investments in the economy contribute to productivity growth; however, excessive zeal among investors can lead to overinvestment. This article explores the concept and causes of overinvestment. The motivation for overinvestment encompasses a combination of factors: the deviation of managers from owners’ goals, information asymmetry, non-standardized corporate governance structures, as well as managerial characteristics and cognitive biases. Resolving these issues is crucial for mitigating the consequences of excessive investments and ensuring a more efficient allocation of resources within companies.
Keywords: excessive investments, motivation for excessive investments, corporate governance structure.
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