Abnormal investment and firm performance
نویسندگان
چکیده
We find a negative relation between abnormal investment and future stock performance. Such is mainly driven by under-investment, not over-investment. Our results are robust to various estimation methods models. Both delayed market reaction agency issues may lead the apparently anomalous return predictability of under-investment. First, investors react promptly fundamental information contained in under-investment about firm’s profitability, asset growth, financial distress probability. Second, returns more pronounced for firms with lower investor monitoring higher costs.
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ژورنال
عنوان ژورنال: International Review of Financial Analysis
سال: 2021
ISSN: ['1873-8079', '1057-5219']
DOI: https://doi.org/10.1016/j.irfa.2021.101886