Discussion of overinvestment of free cash flow

• 成果类型: Editorial Material
• 署名作者: Bergstresser, Daniel
• 署名单位: Harvard University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-006-9002-3
• 发表日期: 2006
• 页码: 191-202
• 关键词: investment; finance

摘要

Richardson's paper is a useful addition to the literature on the relationship between cash flow and investment. His approach to estimating this relationship is a new twist on earlier approaches. Like most of this literature, Richardson finds evidence that firms' investment decisions are excessively sensitive to current cash flow, suggesting that violations of the Modigliani-Miller assumptions are empirically important. My view is that conceptual and implementation problems beset Richardson's attempt to identify the specific violation of the Modigliani-Miller assumptions, and his evidence on this second point is not convincing.