Investment and Internal Finance: Asymmetric Information or Managerial Discretion http://hdl.handle.net/1765/147 RePub Copyright (c) RePub, 2007 2007 Dataset belonging to: Investment and Internal Finance: Asymmetric Information or Managerial Discretion? Jong, A. de Degryse, H. Dataset [Codebook file] belonging to: Jong, A. de, H. Degryse, Investment and Internal Finance: Asymmetric Information or Managerial Discretion?, Rotterdam, 2007 investment financial constraints asymmetric information managerial discretion The Netherlands M G3 G31 85.00 85.30 Bedrijfskunde / Bedrijfseconomie Financieel management besliskunde bedrijfsfinanciering cashflow investeringen HF5001-6182 HF4001-4280.7 HG2028.C45 1977 1977 2003 2003 the Netherland the Netherlands company year annual report data for Dutch companies time_series data panel data Dependent variable: Continuous. Name of model: Standard linear regression model. time-series Centraal Bureau voor de Statistiek Gids bij de officiële prijscourant van de Amsterdamse Effectenbeurs annually 27 annual reports derived from annual reports 27 Annual reports collected by the CBS and blanks filled by data from Officiële Prijscourant Repub 1 data file + DDI XML file (this file) describing the data 2 files This paper examines the relation between cash-flow availability and investment spending in the Netherlands. In particular, we are interested whether managerial discretion and/or asymmetric information drive the positive relation between cash-flow and investment spending. This relation is positive 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 relevance of asymmetric information is confirmed as smaller firms and firms from information-sensitive industries show a larger cash-flow-investment sensitivity. Jong, A. de, H. Degryse, Investment and Internal Finance: Asymmetric Information or Managerial Discretion?, Rotterdam, 2007 (http://hdl.handle.net/1765/147) de_jong_beursondernemingen_77_03.xls xls Investment Fixed Assets Fixed-Investment expenditures (t)/ replacement value of fixed assets (t). Tobin's Q Market value of total assets (t)/ replacement value of total assets (t). Cash-flow Cash-flow (t)/replacement value of fixed assets (t). Change net working capital (Net working capital (t+1)-net working capital(t))/replacement value of fixed assets (t). Sales Sales (t)/replacement value of fixed assets (t). Total Assets Replacement value of fixed assets + book value of other assets; in million Dutch guilders. Dividend Dividend payout ratio (t-1). High Dividend Dummy with value of 1 for firms with average dividend above median (t-1), 0 otherwise. Debt (Long-term debt (t)+short-term bank debt (t))/replacement value of total assets (t). Bank Debt (Long-term bank debt (t)+short-term bank debt (t))/replacement value of total assets (t); 639 observations. High Information Industry Dummy with value of 1 for firms in automation,software and media industries (t-1), 0 otherwise.