Firm Investment and Stakeholder Choices: A Top-Down Theory of Capital Budgeting

• 成果类型: Article
• 署名作者: Almazan, Andres; Chen, Zhaohui; Titman, Sheridan
• 署名单位: University of Texas System; University of Texas Austin; University of Virginia; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12526
• 发表日期: 2017
• 页码: 2179-2228
• 关键词: principal-agent relationship; informed principal; incentive compatibility; inefficient investment; imperfect commitment; moral hazard; MARKETS; COSTS; revelation; leadership

摘要

This paper develops a top-down model of capital budgeting in which privately informed executives make investment choices that convey information to the firm's stakeholders (e.g., employees). Favorable information in this setting encourages stakeholders to take actions that positively contribute to the firm's success (e.g., employees work harder). Within this framework we examine how firms may distort their investment choices to influence the information conveyed to stakeholders and show that investment rigidities and overinvestment can arise as optimal investment distortions. We also examine investment distortions in multi-divisional firms and compare such distortions to those in single-division firms.