The impact of shareholder intervention on overinvestment of free cash flow by overconfident CEOs

International Review of Financial Analysis - Tập 75 - Trang 101751 - 2021
Sewon Kwon1, Jae Hwan Ahn2, Gi H. Kim3
1Lancaster University Management School, Lancaster University, LA1 4YX, UK
2Warwick Business School, University of Warwick, CV4 7AL, UK
3School of Business, Ewha Womans University, 03760, South Korea

Tài liệu tham khảo

Aghion, 2013, Innovation and institutional ownership, American Economic Review, 103, 277, 10.1257/aer.103.1.277 Ahmed, 2013, Managerial overconfidence and accounting conservatism, Journal of Accounting Research, 51, 1, 10.1111/j.1475-679X.2012.00467.x Aktas, 2018, CEO duality, agency costs, and internal capital allocation efficiency, British Journal of Management, 30, 473, 10.1111/1467-8551.12277 Barone-Adesi, 1987, Efficient analytic approximation of American option values, The Journal of Finance, 42, 301, 10.1111/j.1540-6261.1987.tb02569.x Barth, 2017, The economic consequences associated with integrated report quality: Capital market and real effects, Accounting, Organizations and Society, 62, 43, 10.1016/j.aos.2017.08.005 Baysinger, 1991, Effects of board and ownership structure on corporate R&D strategy, Academy of Management Journal, 34, 205, 10.2307/256308 Bebchuk, 2005, The case for increasing shareholder power, Harvard Law Review, 118, 833 Bhagat, 2002 Biddle, 2009, How does financial reporting quality relate to investment efficiency?, Journal of Accounting and Economics, 48, 112, 10.1016/j.jacceco.2009.09.001 Blundell, 1998, Initial conditions and moment restrictions in dynamic panel data models, Journal of Econometrics, 87, 115, 10.1016/S0304-4076(98)00009-8 Brav, 2018, How does hedge fund activism reshape corporate innovation?, Journal of Financial Economics, 130, 237, 10.1016/j.jfineco.2018.06.012 Brav, 2008, Hedge fund activism, corporate governance, and firm performance, The Journal of Finance, 63, 1729, 10.1111/j.1540-6261.2008.01373.x Burns, 2013, Does say-on-pay matter? Evidence from say-on-pay proposals in the United States, Financial Review, 48, 233, 10.1111/fire.12002 Bushee, 1998, The influence of institutional investors on myopic R&D investment behavior, Accounting Review, 73, 305 Campbell, 2011, CEO optimism and forced turnover, Journal of Financial Economics, 101, 695, 10.1016/j.jfineco.2011.03.004 Cella, 2020, Institutional investors and corporate investment, Finance Research Letters, 32, 1, 10.1016/j.frl.2019.04.026 Chen, 2007, Price informativeness and investment sensitivity to stock price, The Review of Financial Studies, 20, 619, 10.1093/rfs/hhl024 Coles, 2006, Managerial incentives and risk-taking, Journal of Financial Economics, 79, 431, 10.1016/j.jfineco.2004.09.004 Cornett, 2007, The impact of institutional ownership on corporate operating performance, Journal of Banking & Finance, 31, 1771, 10.1016/j.jbankfin.2006.08.006 Cremers, 2008, Takeovers and the cross-section of returns, Review of Financial Studies, 22, 1409, 10.1093/rfs/hhn032 Denes, 2017, Thirty years of shareholder activism: A survey of empirical research, Journal of Corporate Finance, 44, 405, 10.1016/j.jcorpfin.2016.03.005 Fama, 1973, Risk, rerurn, and equillibrium: Empircial tests, Journal of Political Economy, 81, 607, 10.1086/260061 Fazzari, 1988, Financing constraints and corporate investment, Brookings Papers on Economic Activity, 1988, 141, 10.2307/2534426 Francis, 1995, Agency costs and innovation: Some empirical evidence, Journal of Accounting and Economics, 19, 383, 10.1016/0165-4101(94)00389-M Franco, 2015, Analyst report readability, Contemporary Accounting Research, 32, 76, 10.1111/1911-3846.12062 Fu, 2010, Overinvestment and the operating performance of SEO firms, Financial Management, 39, 249, 10.1111/j.1755-053X.2010.01072.x García Lara, 2016, Accounting conservatism and firm investment efficiency, Journal of Accounting and Economics, 61, 221, 10.1016/j.jacceco.2015.07.003 Ghosh, 2007, CEO ownership and discretionary investments, Journal of Business Finance & Accounting, 34, 819, 10.1111/j.1468-5957.2007.02011.x Graves, 1988, Institutional ownership and corporate R&D in the computer industry, Academy of Management Journal, 31, 417, 10.2307/256557 Greenwood, 2009, Investor activism and takeovers, Journal of Financial Economics, 92, 362, 10.1016/j.jfineco.2008.05.005 Hall, 2002, Stock options for undiversified executives, Journal of Accounting and Economics, 33, 3, 10.1016/S0165-4101(01)00050-7 Hansen, 1991, Are institutional investors myopic? A time-series study of four technology-driven industries, Strategic Management Journal, 12, 1, 10.1002/smj.4250120102 Heaton, 2002, Managerial optimism and corporate finance, Financial Management, 31, 33, 10.2307/3666221 Hirshleifer, 2012, Are overconfident CEOs better innovators?, The Journal of Finance, 67, 1457, 10.1111/j.1540-6261.2012.01753.x Hsieh, 2014, CEO overconfidence and earnings management during shifting regulatory regimes, Journal of Business Finance & Accounting, 41, 1243, 10.1111/jbfa.12089 Hsu, 2017, Does accounting conservatism mitigate the shortcomings of CEO overconfidence?, Accounting Review, 92, 77, 10.2308/accr-51718 Huang, 2011, Agency cost, top executives’ overconfidence, and investment–cash flow sensitivity: Evidence from listed companies in China, Pacific-Basin Finance Journal, 19, 261, 10.1016/j.pacfin.2010.12.001 Jensen, 1986, Agency costs of free cash flow, corporate finance, and takeovers, American Economic Review, 76, 323 Jensen, 1976, Theory of the firm: Managerial behavior, agency costs and ownership structure, Journal of Financial Economics, 3, 305, 10.1016/0304-405X(76)90026-X Jenter, 2015, CEO turnover and relative performance evaluation, The Journal of Finance, 70, 2155, 10.1111/jofi.12282 Ju, 2014, Options, option repricing in managerial compensation: Their effects on corporate investment risk, Journal of Corporate Finance, 29, 628, 10.1016/j.jcorpfin.2013.11.003 Kalay, 2014, The market value of corporate votes: Theory and evidence from option prices, The Journal of Finance, 69, 1235, 10.1111/jofi.12132 Kaplan, 1997, Do investment–cash flow sensitivities provide useful measures of financing constraints?, Quarterly Journal of Economics, 112, 169, 10.1162/003355397555163 Kim, 2011, CEO ownership, external governance, and risk-taking, Journal of Financial Economics, 102, 272, 10.1016/j.jfineco.2011.07.002 Kim, 2016, CEO overconfidence and stock price crash risk, Contemporary Accounting Research, 33, 1720, 10.1111/1911-3846.12217 Klein, 2006 La Porta, 2000, Investor protection and corporate governance, Journal of Financial Economics, 58, 3, 10.1016/S0304-405X(00)00065-9 Lin, 2018, Private benefits of control and bank loan contracts, Journal of Corporate Finance, 49, 324, 10.1016/j.jcorpfin.2018.01.006 Luo, 2012, CEO compensation, expropriation, and the balance of power among large shareholders, Advances in Financial Economics, 15, 195, 10.1108/S1569-3732(2012)0000015010 Malmendier, 2005, CEO overconfidence and corporate investment, The Journal of Finance, 60, 2661, 10.1111/j.1540-6261.2005.00813.x Morck, 1990, The stock market and investment: Is the market a sideshow?, Brookings Papers on Economic Activity, 1990, 157, 10.2307/2534506 Myers, 1984, Corporate financing and investment decisions when firms have information that investors do not have, Journal of Financial Economics, 13, 187, 10.1016/0304-405X(84)90023-0 Pawlina, 2005, Is investment–cash flow sensitivity caused by agency costs or asymmetric information? Evidence from the UK, European Financial Management, 11, 483, 10.1111/j.1354-7798.2005.00294.x Porter, 1992, Capital choices: Changing the way America invests in industry, Journal of Applied Corporate Finance, 5, 4, 10.1111/j.1745-6622.1992.tb00485.x Richardson, 2006, Over-investment of free cash flow, Review of Accounting Studies, 11, 159, 10.1007/s11142-006-9012-1 Rogers, 2005, Credibility of management forecasts, Accounting Review, 80, 1233, 10.2308/accr.2005.80.4.1233 Schnatterly, 2008, Information advantages of large institutional owners, Strategic Management Journal, 29, 219, 10.1002/smj.654 Schrand, 2012, Executive overconfidence and the slippery slope to financial misreporting, Journal of Accounting and Economics, 53, 311, 10.1016/j.jacceco.2011.09.001 Shleifer, 1986, Large shareholders and corporate control, The Journal of Political Economy, 94, 461, 10.1086/261385 Stiglitz, 1981, Credit rationing in markets with imperfect information, The American Economic Review, 71, 393 Stock, 2005, Testing for weak instruments in linear IV regression, 80 Tribo, 2007, Do the type and number of blockholders influence R&D investments? New evidence from Spain, Corporate Governance: An International Review, 15, 828, 10.1111/j.1467-8683.2007.00622.x Ullah, 2018, Dealing with endogeneity bias: The generalized method of moments (GMM) for panel data, Industrial Marketing Management, 71, 69, 10.1016/j.indmarman.2017.11.010 Ullah, 2020, How to use instrumental variables in addressing endogeneity? A step-by-swep procedure for non-specialists, Industrial Marketing Management