The influence of governance on investment: Evidence from a hazard model

被引:62
作者
Billett, Matthew T. [1 ]
Garfinkel, Jon A. [1 ]
Jiang, Yi [2 ]
机构
[1] Univ Iowa, Tippie Coll Business, Iowa City, IA 52242 USA
[2] Calif State Univ Fullerton, Mihaylo Coll Business & Econ, Fullerton, CA 92634 USA
关键词
Corporate governance; Investment spike; Hazard model; FREE CASH FLOW; CORPORATE GOVERNANCE; FIRMS; SENSITIVITIES; HYPOTHESIS; DECISIONS; FINANCE; HUBRIS; PRICE;
D O I
10.1016/j.jfineco.2011.07.004
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Does corporate governance affect the timing of large investment projects? Hazard model estimates suggest strong shareholder governance may deter managers from pursuing large investments. Controlling for investment opportunities, firms with good governance experience longer spells between large investments. However, in the presence of financial constraints or strong CEO incentives (high delta (a)), we find no such timing differences. Finally, these higher investment hazard firms exhibit significantly negative long-run operating and stock performance. Overall, our findings are consistent with the notion that poor governance associates with overinvestment. (C) 2011 Elsevier B.V. All rights reserved.
引用
收藏
页码:643 / 670
页数:28
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