How the Lean Startup Methodology Affects Enterprise Capital Allocation Efficiency

Abstract

Inefficient corporate investment is a typical manifestation of misallocated resources in capital markets, and traditional governance models can hardly effectively alleviate the inherent uncertainty in investment decision-making. This paper incorporates the Lean Startup Methodology (LSM) into empirical research on capital allocation efficiency. Based on data of A-share listed manufacturing companies in China from 2012 to 2022, it constructs a Lean Startup Practice Index (LSM) using textual analysis, and conducts empirical analysis with a two-way fixed effects model and a two-step mechanism testing framework. The study finds that lean startup practices can significantly inhibit inefficient investment in manufacturing enterprises, and the effect works mainly through three transmission paths: alleviating financing constraints, reducing information asymmetry, and promoting digital transformation. Heterogeneity analysis further shows that this inhibitory effect is more pronounced in non-state-owned enterprises and small and medium-sized enterprises. This paper not only expands the application boundary of lean startup, but also provides new ideas for enterprises to optimize capital allocation based on management process improvement.