Unveil the veil of limited liability: Evidence from firm investment
研究了有限责任对企业投资的影响，发现高风险借款企业更可能转为有限责任，转换后投资激进程度下降但效率提升，表明有限责任鼓励投资并改善投资政策。
Abstract We investigate the effect of limited liability on firm investment. We find firms that intend to borrow but have higher risk have a greater probability of changing to limited liability. With propensity score matching, difference‐in‐differences analysis, and switching regressions with an endogenous switching model, we find that, after the liability regime change, firm investment aggressiveness decreases but on a lesser level than the over‐time change for firms using unlimited liability. We also find there is improvement in investment efficiency and return on invested capital. These results suggest that limited liability encourages firm investment and leads to more effective investment policies.