Corporate Investment, Asymmetric Information and Agency Costs in the UK

Artikel

This paper investigates whether investment spending of firms is sensitive to the availability of internal funds. Imperfect capital markets create a hierarchy for the different sources of funds such that investment and financial decisions are not independent. The relation between corporate investment and free cash flow is investigated using the Bond and Meghir (1994a) Euler-equation model for a panel of 240 companies listed on the London Stock Exchange over a 6-year period. This method allows for a direct test of the first-order condition of an intertemporal maximisation problem. It does not require the use of Tobin's q, which is subject to mis-measurement problems.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Vierteljahrshefte zur Wirtschaftsforschung ; ISSN: 1861-1559 ; Volume: 70 ; Year: 2001 ; Issue: 2 ; Pages: 248-260 ; Berlin: Duncker & Humblot

Classification and Topics

• Classification: Wirtschaft
• Subject: Investition ; Investitionsentscheidung ; Eigentümerstruktur ; Corporate Governance ; Asymmetrische Information ; Großbritannien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Goergen, Marc ; Renneboog, Luc
• Event: Veröffentlichung
• (who): Duncker & Humblot
• (where): Berlin
• (when): 2001

Further information

• DOI: doi:10.3790/vjh.70.2.248
• Handle: http://hdl.handle.net/10419/99217
• Last update: 10.03.2025, 11:42 AM CET