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Título
Effect of ownership structure on underinvestment and overinvestment: empirical evidence from Spain
Autor(es)
Materia
Underinvestment
Overinvestment
Managerial entrenchment
Expropriation
Clasificación UNESCO
5307.13 Teoría de la Inversión
5311.02 Gestión Financiera
5311 Organización y Dirección de Empresas
Fecha de publicación
2009
Editor
Wiley Online Library
Citación
Pindado, Julio., De la Torre, Chabela. (2009). Effect of Ownership Structure on Underinvestment and Overinvestment: Empirical Evidence from Spain.. Accounting & Finance, 49(2), pp. 363-383. doi:10.1111/j.1467 629X.2008.00286.x
Resumen
[EN] This paper investigates how ownership affects the investment-cash flow sensitivityby taking into account the non-linearities of ownership with respect to firmvalue, and using a free cash flow index and a criterion for financial constraintsto disentangle underinvestment and overinvestment. Interesting results are pro-vided by estimating using the Generalized Method of Moments to eliminate theendogeneity problem. The alignment of interests between owners and managersand the monitoring by concentrated ownership both alleviate the sensitivity ofinvestment to cash flow both in underinvestor and overinvestor firms. However,in the presence of controlling owners, underinvestment and overinvestment areexacerbated.
URI
ISSN
0810-5391
DOI
10.1111/j.1467-629X.2008.00286.x
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