Does going public imply short-termism in investment behavior? Evidence from China

Adopting a large panel of Chinese manufacturing firms together with the data of listed firms for the period 1998-2007, this paper aims to examine whether Asker et al.'s (2015) argument on the short-termism demonstrated in the investment behavior of listed firms holds for China. We document that listed firms engage in more investments and respond more to changes in investment opportunities as compared to unlisted ones with similar size and age in the same industries, and Asker et al.'s (2015) short-termism argument only holds for firms facing sufficiently low financing constraints.