The impact of executive characteristics on investment strategy efficiency: Evidence from Chinese A-share listed firms

Investment efficiency is a key parameter in modern business as it reflects the optimisation of capital in ventures taken up by a firm through positive net present value. However, in recent times, it has been understood that Chinese firms have shown traits of underinvestment or overinvestment (Guariglia & Yang, 2016; Gao et al., 2025). This leads to investment inefficiency and a loss in revenue for such firms. As a result, it is necessary to understand the factors responsible for such inefficiencies. The research also used artificial intelligence (AI) adoption as a mediating role in shaping capital allocation efficiency. Using an unbalanced panel dataset of 3773 firms from 2009 to 2023 (27790 firm-year observations), a fixed effects model was used as a baseline model and two-stage least squares (2SLS) regression as a robustness check to address potential endogeneity. The results indicate that chief executive officer (CEO) age has a statistically significant negative effect on investment efficiency, meaning that older CEOs are associated with higher investment efficiency, while overseas experience and academic qualifications do not exert a consistent influence. Additionally, AI adoption also mediates the executive-investment relationship significantly. These results have important implications for corporate governance, strategic leadership, and AI investment strategies in emerging markets.