In today’s rapidly evolving business environment, how can institutional investors and analysts ensure that firms make efficient investment decisions? One powerful yet underexplored tool is site visits, where visitors physically inspect operations, interact with employees, and meet executives face-to-face.

Prof. Angie WANG from the School of Accounting and Finance (AF) at The Hong Kong Polytechnic University (PolyU) investigated the role of site visits in enhancing corporate investment efficiency and identified several factors that influence their disciplinary impact.

Prof. Wang’s research reveals that site visits play a critical role in improving corporate investment efficiency. Firms with higher site visit intensity show stronger responsiveness to growth opportunities, demonstrating the disciplinary benefits of site visits. These benefits are particularly pronounced when visitors have better access to investment-related information, stronger incentives, and greater power to monitor managers.

The study also highlights that the positive effects of site visits are more significant for firms with severe agency problems or high asset tangibility, where effective monitoring is most needed. By allowing institutional investors and financial analysts to gather valuable insights and hold management accountable, site visits contribute to better corporate governance and decision-making.

In addition, Prof. Wang’s research emphasizes the importance of site visits in addressing information asymmetry, mitigating agency conflicts, and enhancing transparency, making them a valuable tool for improving corporate practices.

Keywords: Site visits, corporate investment, agency problems, information asymmetry, monitoring

Research Paper: Cao, S. S., Gong, G., Kim, Y., Shi, H., & Wang, A. (2025). Site Visits and Corporate Investment Efficiency. Management Science, 71(1), 635–658. https://doi.org/10.1287/mnsc.2022.00302

👉 Read the original article: [https://doi.org/10.1287/mnsc.2022.00302]