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Articles 1 - 15 of 15
Full-Text Articles in Business
Why Do U.S. Firms Invest Less Over Time?, Fangjian Fu, Sheng Huang, Rong Wang
Why Do U.S. Firms Invest Less Over Time?, Fangjian Fu, Sheng Huang, Rong Wang
Research Collection Lee Kong Chian School Of Business
Capital expenditures of U.S. public firms, relative to total assets, decrease by more than half from 1980 to 2020. The decline is pervasive across industries and firms of different characteristics and cannot be explained by the usual determinants of investment and many other seemingly plausible reasons. The decline is consistent with the transformation in production technology — firms rely more on intangible capital and less on fixed assets in production. Industry-level analyses yield supporting evidence. We observe similar declining trend in capital expenditure in other developed countries but not in most emerging markets.
Short Interest And Corporate Investment: Evidence From Supply Chain Partners, Xia Chen, Guojin Gong, Shuqing Luo
Short Interest And Corporate Investment: Evidence From Supply Chain Partners, Xia Chen, Guojin Gong, Shuqing Luo
Research Collection School Of Accountancy
Short interest contains valuable information about a firm’s business fundamentals. We investigate whether such information affects business partners’ real investment decisions in the supply-chain setting. We predict and find that a supplier’s future investments (including inventory, R&D, and tangible asset investments) decrease with its customer’s current short interest. This negative relation is stronger when the supplier faces greater difficulty in assessing its customer’s business fundamentals and when short interest is more likely to indicate longlasting deterioration in the customer’s fundamentals. Additional analysis does not support the alternative explanation that the supplier adjusts investments in response to unfavorable information obtained via …
The Equity-Financing Channel, The Catering Channel, And Corporate Investment: International Evidence, Yuanto Kusnadi, John K. C. Wei
The Equity-Financing Channel, The Catering Channel, And Corporate Investment: International Evidence, Yuanto Kusnadi, John K. C. Wei
Research Collection School Of Accountancy
We examine how stock market mispricing affects corporate investment in an internationalsetting. We find that investment is more sensitive to stock prices for equity-dependent firms thanfor non-equity-dependent firms in our international sample. Investment is also more sensitive tostock prices for firms located in countries with more developed capital markets (i.e., lower costsof raising capital), higher share turnover (i.e., shorter shareholder horizons), and higher R&Dintensity (i.e., more opaque assets). More importantly, the positive relation between equitydependence and the sensitivity of investment to stock prices is more pronounced for firmslocated in these same countries. These findings are consistent with the equity-financinghypothesis and …
The Equity-Financing Channel, The Catering Channel, And Corporate Investment: International Evidence, Yuanto Kusnadi, K.C. John Wei
The Equity-Financing Channel, The Catering Channel, And Corporate Investment: International Evidence, Yuanto Kusnadi, K.C. John Wei
Research Collection School Of Accountancy
We examine how stock market mispricing affectscorporate investment in an international setting. We find that investment ismore sensitive to stock prices for equity-dependent firms than for non-equity-dependentfirms in our international sample. Investment is also more sensitive to stockprices for firms located in countries with more developed capital markets (i.e.,lower costs of raising capital), higher share turnover (i.e., shortershareholder horizons), and higher R&D intensity (i.e., more opaque assets). More importantly, the positive relation between equitydependence and the sensitivity of investment to stock prices is more pronouncedfor firms located in these same countries. These findings are consistent withthe equity-financing hypothesis and the …
Corporate Investment And Stock Liquidity: Evidence On The Price Impact Of Trade, Moonsoo Kang, Wei Wang, Chanyoung Eom
Corporate Investment And Stock Liquidity: Evidence On The Price Impact Of Trade, Moonsoo Kang, Wei Wang, Chanyoung Eom
Business Faculty Publications
We document that corporate investment contributes to stock liquidity. This study demonstrates a positive relationship between abnormal corporate investment and stock liquidity in the cross-section.Moreover, stock liquidity
improves more apparently for firms with financial constraints. Our robustness check confirms that the
existing regularities cannot explain the current finding. This analysis suggests that corporate investment decreases
the risk of a firm and that a change in the risk affects the behavior of a market maker, leading to an increase
in stock liquidity.
Political Turnovers, Ownership, And Corporate Investment In China, Jerry X. Cao, Julio Brandon, Tiecheng Leng, Sili Zhou
Political Turnovers, Ownership, And Corporate Investment In China, Jerry X. Cao, Julio Brandon, Tiecheng Leng, Sili Zhou
Research Collection Lee Kong Chian School Of Business
We examine the impact of political influence and ownership on corporate investment by exploiting the unique way provincial leaders are promoted in China. The tournament-style promotion system creates incentives for new governors to exert influence over investment in the early years of their term. We find a divergence in investment rates between state owned enterprises (SOEs) and private firms following political turnover. SOEs increase investment by 6.0% following the turnover while investment rates for private firms decline, suggesting that the political influence exerted over SOEs may crowd out private investment.
The Effect Of Labor Unionization On Corporate Investment Efficiency, Yu Zhang
The Effect Of Labor Unionization On Corporate Investment Efficiency, Yu Zhang
Graduate Masters Theses
This paper examines the relationship between labor unionization rates and corporate investment efficiency using 55,300 firm-year observations from 1983–2002. I find evidence that labor unionization rates are negatively associated with underinvestment and overinvestment, which suggests that labor unions can improve investment efficiency. I also find that labor unions and financial reporting quality are complementary in improving investment efficiency.
Why Do U.S. Firms Invest Less Over Time?, Fangjian Fu, Sheng Huang, Rong Wang
Why Do U.S. Firms Invest Less Over Time?, Fangjian Fu, Sheng Huang, Rong Wang
Research Collection Lee Kong Chian School Of Business
The ratio of capital expenditure to total assets of U.S. firms decreases by more than half from 1980 to 2012. The decline in capital investment is pervasive; it has occurred for firms in most industries and is robust to firms of different sizes, investment opportunities, profitability, accesses to external financing, and expenses on R&D or acquisitions. Existing theories of corporate investment fall short in explaining the decline trend. The decline is also not explained by time variation in firm characteristics, industry composition, and public listing cohorts, or by corporate lifecycle. Our further evidence suggests that it is related to the …
Do Internal Funds Play An Important Role In Financing Decisions For Constrained Firms?, Barun Roychowdhury
Do Internal Funds Play An Important Role In Financing Decisions For Constrained Firms?, Barun Roychowdhury
CMC Senior Theses
In this paper, I discuss the importance of internal funds for corporate investment among financially constrained firms. I use the paper ‘Financing Constraints and Corporate Investments’ by Fazzari, Hubbard and Petersen.as a base for my framework. I focus on a specific paper refuting their findings and their response in order to fully understand the benefits and costs of the framework. I then apply the original framework to a recent sample that covers the Great Recession to see the results of the initial paper are still valid today and if the recent recession and elongated recovery had an even more adverse …
Essays On International Corporate Cash Holdings, Yonghong Jia
Essays On International Corporate Cash Holdings, Yonghong Jia
Wayne State University Dissertations
This dissertation is composed of two distinct chapters. The first chapter is concerned with the secular trends in corporate cash holdings and the determinants of the changing cash policies for seven industrialized countries--Australia, Canada, France, Germany, Japan, the US, and UK. In the first chapter, we document that a pronounced secular upward trend in cash holdings is almost systemic across sample countries over 1991-2008, with France exhibiting a modest rise and Japan a substantial decline. However, the driving forces underlying the cash pattern are not uniform across countries. While the evolution in firm characteristics necessitated elevated cash balances, the time-varying …
Corporate Investment Activity, Industrial And Global Diversification And Internal Capital Markets, Ozgur Berk Kan
Corporate Investment Activity, Industrial And Global Diversification And Internal Capital Markets, Ozgur Berk Kan
Theses and Dissertations in Business Administration
Recent empirical studies document the average industrially diversified firm trades at a discount than a portfolio of comparable single-segment firms while geographically diversified firms are shown to face similar, if not higher, discounts. They attribute the diversification discount to inefficient allocation of capital in diversified firms. Most of this literature uses aggregate capital expenditures and cash flows data across divisions obtained from Compustat industry-segment and geographic-segment data tapes. In our first paper, we employ firm-specific data to examine the pre- and post-acquisition performance of firms engaging in diversifying and non-diversifying investments in order to determine whether the diversification discount may …
Corporate Investment Decisions And Security Values, Gary G. Lichtenberg
Corporate Investment Decisions And Security Values, Gary G. Lichtenberg
Theses
The study of the impact of the announcement of various investment decisions of firms on their security values has occupied a central role in research in the area of finance. One has merely to skim the title pages of finance journals to confirm this preeminent position. The studies, to date, have generally used the Capital Asset Pricing Model to analyze the impact of these announcements. The development of the literature in the area of contingent claim pricing provides a new methodology in tackling the above issues. This thesis uses the option pricing framework to study the effects of two specific …
Testimony In Support Of House Bill 801 Before The State Of Ohio House Of Representatives Economic Affairs And Federal Relations Committee, November 21, 1979, Prexy Nesbitt
Rozell 'Prexy' Nesbitt Writings and Speeches
Prexy Nesbitt, a Chicago-based anti-apartheid activist, was then Research Secretary for the Program to Combat Racism of the World Council of Churches. He delivered this testimony to the House of Representatives, State of Ohio, about a proposed bill to divest state funding and corporate investment in South Africa. 23 pages.
New Strategies For International Action Against Transnational Corporate Collaboration With Apartheid, Prexy Nesbitt
New Strategies For International Action Against Transnational Corporate Collaboration With Apartheid, Prexy Nesbitt
Rozell 'Prexy' Nesbitt Writings and Speeches
Prexy Nesbitt, a Chicago-based anti-apartheid activist, delivered this seminar paper at the International Seminar on the Role of Transnational Corporation in South Africa, Organised by the Anti-Apartheid Movement in cooperation with the United Nations Special Committee against Apartheid at the Inter-Governmental Maritime Consultative Organisation (IMCO) in Piccadilly, London, United Kingdom. Prexy Nesbitt was then director of the African Project, Institute for Policy Studies, and former National Co-ordinator of the US Campaign to Oppose Bank Loans to South Africa. 16 pages.
Raising Investors Consciousness: The Campaign Against Investments, Prexy Nesbitt
Raising Investors Consciousness: The Campaign Against Investments, Prexy Nesbitt
Rozell 'Prexy' Nesbitt Writings and Speeches
Prexy Nesbitt, a Chicago-based anti-apartheid activist, co-wrote this piece with Timothy H. Smith, published in Christianity and Crisis. Timothy H. Smith was then director of the Interfaith Center on Corporate Responsibility and Prexy Nesbitt was then associate director of the American Committee on Africa and coordinator of the Committee to Oppose Bank Loans to South Africa. 4 pages.