Over-investment of free cash flow

By Scott A. Richardson. 2006

2,642 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/bdadc0a29657ccba0d76f805f6458213e486fdd3

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Citations in the corpus

Free cash flow, over-investment and corporate governance in China (2016, methodology): “Consistent with prior literature (Richardson, 2006; Malmendier and Tate, 2005), the coefficient of positive free cash flow for either pooled regression estimates or average estimates from annual regressions (the estimate of 2 is 0.183 for pooled regression, and 0.209 for Fama-MacBeth method,…”
The Interplay between Working Capital Management and a Firm’s Financial Performance across the Corporate Life Cycle (2020, background): “Studies also contend that the corporate life cycle (CLC) stage has a strong impact on its operating performance [17], financing [18], investment [19] and bankruptcy risk [20].”
The effects of financial reporting and disclosure on corporate investment: A review (2019, background): “For example, Amihud and Lev (1981) propose a model in which risk-averse managers reduce their 16 See, e.g., Harford (1999), Richardson (2006), and Hanlon et al. (2015) for empirical evidence.”
Board of Director Gender and Corporate Tax Aggressiveness: An Empirical Analysis (2017, background): “Younger firms are more likely to undertake larger, growth-orientated investments, while older more mature firms are likely to be focussed on asset maintenance (Richardson 2006).”
Capital structure, executive compensation, and investment efficiency (2013, result): “…are highly correlated and produce similar results, we report only those based on our main proxy.6 3 Recent studies that also measure investment distortions by the difference between actual and expected investment are, for example, Titman et al. (2004), Richardson (2006), and Eisdorfer (2011).”
A balancing act: Managing financial constraints and agency costs to minimize investment inefficiency in the Chinese market (2016, methodology): “Following Richardson (2006), a dynamic investment expectation model is used to predict the expected investment expenditure in new positive NPV projects (Ie_newi,t), which can be interpreted as the optimal level of investment expenditure.7 Specifically, denoting with I_new the firm's new investment…”
How Does Financial Reporting Quality Relate to Investment Efficiency (2009, positive): “This approach follows Richardson (2006). As a robustness check, we decompose the overall investment into two components.”
Value creation from M&As: New evidence (2017, positive): “…including cultural incompatibility, which can hamper post-merger integration (Shrivastava, 1986; Hayward, 2002; Ahern, 2010 and Alexandridis et al. 2013). as asset disposals based on Richardson (2006) shows that the extent of over-and under-investment has significantly receded post-2009.”
Bringing it Home: A Study of the Incentives Surrounding the Repatriation of Foreign Earnings Under the American Jobs Creation Act of 2004 (2009, background): “However, Dittmar (2000) and Core, Guay, Richardson, and Verdi (2005) find a positive relation between repurchases and size, and Barclay, Smith, and Watts”
Financial Reporting Quality and Labor Investment Efficiency (2014, neutral): “, empire building) in the academic literature (e.g., Jensen 1986; Richardson 2006), but can also lead to underinvestment if, for example, managers pass up profitable investment opportunities because they are effort-averse and prefer the “quiet life” (Bertrand and Mullainathan 2003).”
Multiple large shareholders and corporate investment: Evidence from China (2018, positive): “…et al., 2009), or a function of lagged ﬁ rm characteristics such as Size t − 1 , Leverage t − 1 , Cash t − 1 , List t − 1 , Stock Returns t − 1 , Investment t − 1 , TQ t − 1 , year and industry ﬁ xed effect (Richardson, 2006 Table 7 presents the results from the multinomial logit pooled regression.”
Management Forecast Quality and Capital Investment Decisions (2014, neutral): “…relation between managerial tasks that draw on common forecasting ability, our 3 See e.g., Fazzari et al. (1988), Wurgler (2000), Biddle and Hilary (2006), Richardson (2006), Whited (2006), Acharya, Almeida, and Campello (2007), McNichols and Stubben (2008), and Biddle, Hilary, and Verdi (2009).”
Evidence on the Role of Accounting Conservatism in Monitoring Managers' Investment Decisions (2011, background): “We exclude financial service and insurance firms from the analysis as the classification between operating, investing, and financing activities is ambiguous for these firms (Richardson, 2006).”
The impact of corporate social responsibility on financial constraints: Does the life cycle stage of a firm matter? (2019, background): “Firms are more likely to undertake relatively larger, growth-oriented investments in the initial stage while in the mature stage their investments are more likely to be geared toward the maintenance of assets in place (Richardson, 2006).”