![](local/cache-vignettes/L300xH470/rubon9-59d38.jpg?1724744805)
-
Journal menu
- General information
- Editorial Board and External Reviewers
- Journal Policies
- Publication Ethics and Malpractice Statement
- Instructions for authors
- Paper reviewing
- Article processing charge
- Feedback from stakeholders
- Journal’s Open Access statement
- Order hard copies of the journal
- 50 most cited papers in the journal
CORPORATE GOVERNANCE AND INVESTMENTS
Download This ArticleAbstract
We investigate the impact of corporate governance on physical and R&D investments in a Seemingly Unrelated Regressing (SUR) system. Marginal q’s are estimated using firm fundamental information for physical and R&D investments separately. We find that takeover pressure boosts both physical and R&D investments, public pension funds ownership has a U-shaped relation with physical investment, and greater director ownership is associated with lower physical investment and higher R&D investment. As far as investment distortions are concerned, takeover pressure mitigates the free cash flow problem and exacerbates the debt overhang problem, while public pension funds stockholding and director ownership alleviates the debt overhang for physical investment, and R&D investment, respectively.
Keywords: Corporate Governance, Physical Investment, R&D Investment, Free Cash Flow Problem, Debt Overhang
How to cite this paper: Wang, W. (2014). Corporate governance and investments. Corporate Ownership & Control, 11(3-2), 294-311. https://doi.org/10.22495/cocv11i3c2p6