Abstract
PurposeIn this study, the authors explore the association between employee education level and the efficiency of corporate investment using data from a sample of Chinese listed firms during the period from 2011 to 2018. By examining the impact of education on investment efficiency, the authors' study provides valuable insights that contribute to a deeper understanding of the underlying economic mechanisms related to education.Design/methodology/approachThe authors conduct multivariate regression analyses to examine the relationship between investment efficiency (following Richardson, 2006) and the level of employee education, along with a series of control variables. To ensure the reliability of the authors' findings, the authors subject the their results to a comprehensive set of robustness tests, such as a staggered difference-in-difference (DiD) regression approach, an instrumental variable (IV) method and the use of alternative employee education level and investment efficiency measurements.FindingsThe findings offer compelling evidence that higher levels of education have a positive impact on firms' investment efficiency, and this effect remains robust across various model specifications and endogeneity considerations. Moreover, the influence of education is more pronounced in firms that prioritize employee training, maintain effective internal communication and offer attractive financial rewards. Furthermore, the results suggest that the relationship between education and investment efficiency is influenced by the firms' business nature and competitive environment. Factors such as business complexity, labor intensity and business location also play a role in shaping the impact of education on investment outcomes.Originality/valueThe study emphasizes the crucial role of education in influencing investment decisions and performance within firms. By delving into this previously unexplored area, the authors' research contributes to the existing literature, establishing that the level of employee education is a significant determinant of corporate investment efficiency. This valuable insight has substantial implications for firms aiming to enhance their investment decision-making processes and overall performance. Understanding the positive impact of education on investment efficiency can empower organizations to leverage their human capital effectively and achieve better investment outcomes, ultimately contributing to long-term success and competitiveness in the market.