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Mutual fund holdings data reveal a significant impact of mutual funds on the capital expenditures ("CapEx'') of their portfolio companies. Following the shock to mutual fund ownership caused by the 2003 scandal, during which 25 fund families experienced significant outflows of capital, firms...
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The endogeneity problem has always been one, if not the only, obstacle to understanding the true relationship between different aspects of empirical corporate finance. Variables are typically endogenous, instruments are scarce, and causality relations are complicated. As the first attempt to...
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managerial overconfidence and investment policy in small and medium-sized firms. We construct direct estimates of managerial … evidence on the determinants of failed (downsized, delayed or abandoned) corporate investment projects. Controlling for socio …-demographic variables and firm characteristics, we find that investment projects planned by overconfident managers are more likely to fail …
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I study how different types of subsidization affect investment decisions in a laboratory experiment. Even though the … investment alternatives get subsidized with tax credits the willingness to invest in the subsidized alternative increases …
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We report laboratory experiments investigating the cyclicality of profit-enhancing investment in a competitive … environment. In our setting, optimal investment is counter-cyclical when investment costs fall following market downturns. However …, we do not observe counter-cyclical investment. Instead we see much less strategic behavior than our rational investment …
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