Gugler, Klaus. 2003. Corporate Governance and Investment. International Journal of the Economics of Business 10 (3): 261-289.
BibTeX
Abstract
This paper contributes at least threefold to the investment-cash flow literature. First, it finds that the corporate governance environment of a firm affects the relationship between investment and cash flow. Second, we allow for both asymmetric information and managerial discretion explanations for positive investment-cash flow coefficients, thereby overcoming most of the ambiguities in this interpretation. Finally, by using a GMM estimator we avoid most of the problems with traditional OLS models. We find that family-controlled firms appear to suffer from cash constraints as evidenced by a positive and robust relationship of investment to cash flow. State-controlled firms also exhibit a positive and significant cash flow sensitivity, which we explain by managerial discretion.
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Status of publication | Published |
---|---|
Affiliation | WU |
Type of publication | Journal article |
Journal | International Journal of the Economics of Business |
WU-Journal-Rating new | FIN-A, STRAT-C |
Language | English |
Title | Corporate Governance and Investment |
Volume | 10 |
Number | 3 |
Year | 2003 |
Page from | 261 |
Page to | 289 |
Associations
- People
- Gugler, Klaus (Details)
- Organization
- Research Institute for Regulatory Economics FI (Details)
- Department of Economics (Gugler) (Details)