This study identifies several interrelated reasons why firms' depreciation method choice is likely to influence managers' capital investment decisions. We find that firms that use accelerated depreciation make significantly larger capital investments than firms that use straight-line...

One outcome of the existence of social capital in a community is that individuals will take into consideration the welfare of other members of the community. If an investment project is undertaken that causes the poorer members of society to increase their consumption of goods and services to...

This book presents a new approach to the valuation of capital asset investments and investment decision-making. Starting from simple premises and working logically through three basic elements (capital, income, and cash flow), it guides readers on an interdisciplinary journey through the...

Extant theories suggest that managers may use hedging either to alleviate underinvestment problems caused by costly external financing or to promote overinvestment by circumventing the scrutiny of external capital markets. We empirically investigate this issue using a hand-collected dataset of...

We find that investment responds more sensitively to a firm's Tobin's q when its share price is more discrete. Low-price U.S. stocks exhibit higher investment-q sensitivity, but this pattern disappears in countries whose tick sizes increase with share prices. Using Tick Size Pilot Program as a...

The Republic of Serbia is characterized by an unsatisfactory macroeconomic environment. Under the conditions of an evident shortage of liquid assets, the financial capital has moved from real to the financial sector, which led companies to over-indebtedness and shutdown of their own capacities....

We propose the standard neoclassical model of investment under uncertainty with short-run adjustment frictions as a benchmark for earnings-return patterns absent accounting influences. We show that our proposed benchmark generates a wide range of earnings-return patterns documented in accounting...

We propose the standard neoclassical model of investment under uncertainty with short‐run adjustment frictions as a benchmark for earnings‐return patterns absent accounting influences. We show that our proposed benchmark generates a wide range of earnings‐return patterns documented in...

The accuracy of firm information disclosures and the efficiency of long-term investment both play crucial roles in the economy and capital markets. We estimate a dynamic model that captures a trade-off between these two goals that arises when managers confront realistic incentives to misreport...

This Appendix reports results on several additional analyses conducted in order to lend support to and extend our baseline finding presented in the above-mentioned paper. These involve the use of an alternative method of measuring CS, an alternative method to measure investment opportunities,...