Abstract
This study analyzes corporate expenditures for property, plant and equipment (PP&E), and research and development (R&D) for over 2500 US firms from 1988 to 1994. We find no support for the contention that institutional investors cause corporate managers to behave myopically. Indeed, we document a positive relation between industry-adjusted expenditures for PP&E and R&D and the fraction of shares owned by institutional investors. This relation is robust to a variety of empirical tests, including those that account for endogeneity between institutional ownership and firm-level discretionary expenditures.
Original language | English (US) |
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Pages (from-to) | 307-329 |
Number of pages | 23 |
Journal | Journal of Corporate Finance |
Volume | 6 |
Issue number | 3 |
DOIs | |
State | Published - Sep 1 2000 |
Externally published | Yes |
Keywords
- Endogeneity
- Institutional investors
- Managerial myopia
ASJC Scopus subject areas
- Business and International Management
- Finance
- Economics and Econometrics
- Strategy and Management