Investment warning for big businesses: rising complexity often undermines a company's ability to make efficient investment decisions
Investment warning for big businesses: rising complexity often undermines a company's ability to make efficient investment decisions
Investment is the lifeblood of businesses. It is how they grow, innovate and stay competitive. Yet not all investment is productive. Companies can underinvest in valuable opportunities or overspend on poor ones. The result is inefficiency: wasted capital, missed growth and weaker long-term performance. Our recent research, Firm complexity and investment inefficiency, sheds light on a subtle but powerful driver of these inefficiencies: corporate complexity. As businesses grow, diversify and expand across markets, they inevitably become more complex. But our evidence shows that rising complexity often undermines a company’s ability to make efficient investment decisions.
Association of Chartered Certified Accountants
Pantelis, Kazakis
bad8787f-df31-41b5-b84f-929d6496ae78
Leung, Woon Sau
73a8bf54-6035-4f11-a9ec-74272abbacb5
Ongena, Steven
4aaf57bf-078c-4145-9651-8cfba8267089
23 October 2025
Pantelis, Kazakis
bad8787f-df31-41b5-b84f-929d6496ae78
Leung, Woon Sau
73a8bf54-6035-4f11-a9ec-74272abbacb5
Ongena, Steven
4aaf57bf-078c-4145-9651-8cfba8267089
Kazakis Pantelis (Author),
Woon Sau Leung (Author),
Steven Ongena (Author)
(2025)
Investment warning for big businesses: rising complexity often undermines a company's ability to make efficient investment decisions
Association of Chartered Certified Accountants
Abstract
Investment is the lifeblood of businesses. It is how they grow, innovate and stay competitive. Yet not all investment is productive. Companies can underinvest in valuable opportunities or overspend on poor ones. The result is inefficiency: wasted capital, missed growth and weaker long-term performance. Our recent research, Firm complexity and investment inefficiency, sheds light on a subtle but powerful driver of these inefficiencies: corporate complexity. As businesses grow, diversify and expand across markets, they inevitably become more complex. But our evidence shows that rising complexity often undermines a company’s ability to make efficient investment decisions.
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Published date: 23 October 2025
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Local EPrints ID: 507384
URI: http://eprints.soton.ac.uk/id/eprint/507384
PURE UUID: 642877f2-b43c-431e-b92d-ad6c3345e071
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Date deposited: 08 Dec 2025 17:40
Last modified: 09 Dec 2025 03:09
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Contributors
Author:
Kazakis Pantelis
Author:
Woon Sau Leung
Author:
Steven Ongena
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