Quotation Gugler, Klaus. 2003. Corporate Governance and Investment. International Journal of the Economics of Business 10 (3): 261-289.


RIS


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.

Tags

Press 'enter' for creating the tag

Publication's profile

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)
Institute for Quantitative Economics IN (Details)
Google Scholar: Search