Financement Interne et Investissement : Asymétrie d’Information vs Discrétion Managériale
Year: 2007
Type: preprint
Abstract: This paper examines the investment-cash-flow sensitivity in a sample of 150 american firms over the period 1995-2004. Investment-cash-flow sensitivities can be attributed either to overinvestment resulting from the abuse of managerial discretion (Jensen [1986] and Stulz [1990]), or to underinvestment due to information problems (Myers et Majluf [1984]). We use Tobin’s Q to discriminate between firms with these problems, where low Q firms face the managerial discretion problem and high Q firms the asymmetric information problem. Similarly to Degryse et De Jong [2006], we had found evidence which highlights substantially larger investment-cash-flow sensitivity for low Q firms. This finding shows that our empirical test provides support for managerial discretion hypothesis.
Source: SSRN Electronic Journal
Authors: Kamel Naoui, Moez Elgaied, Feker Bayoudh
Language: French
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2518975785