Capital budgeting, uncertainty, and misallocation

• 成果类型: Article
• 署名作者: Charoenwong, Ben; Kimura, Yosuke; Kwan, Alan; Tan, Eugene
• 署名单位: National University of Singapore; Institute of Science Tokyo; Tokyo Institute of Technology; University of Hong Kong; University of Toronto
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2024.103779
• 发表日期: 2024
• 关键词: Corporate investment; expectations; formation; Intangible capital; INFORMATION; learning

摘要

In canonical models of investment dynamics under uncertainty, time -to -build in investment decisions implies that uncertainty negatively impacts firm values and aggregate capital productivity. However, capital budgeting, which involves ex -ante information acquisition and state -contingent investment decisions, can potentially ameliorate time -to -build frictions. Reduced -form evidence using firm -level data on sales and investment expectations and errors supports both mechanisms. Incorporating capital budgeting into a standard investment model, our calibrated model reveals that state -contingent investment planning and information acquisition reduce aggregate productivity losses by 41% and 17%, respectively. Moreover, gains from planning accrue primarily to less productive firms, while information acquisition benefits higher productivity ones.