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

• 成果类型: Article
• 署名作者: Billett, Matthew T.; Garfinkel, Jon A.; Jiang, Yi
• 署名单位: University of Iowa; California State University System; California State University Fullerton
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2011.07.004
• 发表日期: 2011
• 页码: 643-670
• 关键词: CORPORATE GOVERNANCE; Investment spike; Hazard model

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.