The study looked at how free cash flow and corporate governance affect investments in Chinese listed firms. They found that firms with extra cash tend to invest too much, especially if they have positive cash flow. Certain governance characteristics also influence investment decisions. State-owned firms tend to over-invest more, while firms with more tradable shares or larger boards invest more wisely. On the other hand, under-investment is seen in firms with higher state-ownership or larger boards of directors. Firms with higher leverage or more tradable shares tend to avoid under-investment.