Investment and Internal Finance: Asymmetric Information or Managerial Discretion?
Dataset belonging to the publication
This paper examines the relation between cash-flow availability and investment spending in The Netherlands. In particular we are interested whether manae for both firms with low and high investment opportunities. It is however significantly larger for firms with low investment opportunities, suggesting that the managerial-discretion problem is most important in the Dutch setting. Effective corporate-governance may reduce this agency problem. Specific to The Netherlands, firms with low shareholder influence posit a higher cash-flow investment sensitivity.The relavnce of asymmetric information is confirmed as smaller firms and firms from information-sensitive industries show a larger cash-flow investment sensitivity.
|Keywords||The Netherlands, asymmetric information, financial constraints, investment, managerial discretion|
|JEL||Corporate Finance and Governance (jel G3), Capital Budgeting; Investment Policy (jel G31), Business Administration and Business Economics; Marketing; Accounting (jel M)|
|Publisher||Erasmus Research Institute of Management (ERIM)|
de Jong, A, & Degryse, H. (2007). Investment and Internal Finance: Asymmetric Information or Managerial Discretion?. Datasets. Erasmus Research Institute of Management (ERIM). Retrieved from http://hdl.handle.net/1765/11255