Results 271 to 280 of about 8,186 (320)
How underinvestment reduces underpricing
International Journal of Finance and EconomicsAbstractWe develop an economic model demonstrating that firms can benefit from committing to underinvestment. The model considers a firm's IPO, secondary‐market trading and subsequent investment decision. We analyse the conditions under which underinvestment can paradoxically be advantageous despite reducing the fundamental value of the firm.
Marco Bade
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Underinvestment and Market Structure [PDF]
, 1998 This paper analyses a dynamic game of investment in R&D or advertising, where current investments change future market conditions. It investigates whether underinvestment can be supported in equilibrium by the threat of escalation in investment outlays.
Nocke, Volker
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THE POLITICS OF UNDERINVESTMENT IN AGRICULTURAL RESEARCH [PDF]
, 1996 This paper develops a political economy framework that determines the factors causing underinvestment in public research expenditures. Governments are unable to fully compensate for unequal income distribution effects of research because of either their inability to make credible commitments or of deadweight costs associated with compensation.
De Gorter, Harry +3 more
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Underinvestment in Public Good Technologies
Journal of Technology Transfer, 2004Although underinvestment phenomena are the rationale for government subsidization of research and development (R&D), the concept is poorly defined and its impact is seldom quantified. Conceptually, underinvestment in industrial R&D can take the form of either a wrong amount or a suboptimal composition of R&D investment.
Gregory Tassey
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Societal trust and corporate underinvestment
Global Finance Journal, 2022Andreas Knetsch, Astrid Salzmann
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The Underinvestment Problem, Bond Covenants, and Insurance [PDF]
The Journal of Risk and Insurance, 1993 Introduction The underinvestment problem has been well known in finance since the appearance of Myers's (1977) seminal work on "The Determinants of Corporate Borrowing." Myers considers a situation in which the firm has an outstanding bond issue now and may invest in a positive net present value project then.(1) The payoff on the investment project is ...
James R. GARVEN, Richard D. MACMINN
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Corporate control and underinvestment
Journal of Management & Governance, 2011This paper reports a study of how the benefits that large shareholders derive from their control of a firm affect the equity issue and investment decisions of the firm. I introduce an explicit agency cost structure based on the benefits of control of the largest shareholder.
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OPERATING LEVERAGE AND UNDERINVESTMENT
Journal of Financial Research, 2019AbstractUsing a contingent claims model, we examine the impacts of both operating leverage and financial leverage on a firm's investment decisions in the context of capacity expansion. Our model shows that quasi‐fixed operating costs could significantly mitigate the underinvestment problem for debt‐financed firms.
Feng Jiao +2 more
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Underinvestment or/and Overinvestment?
2012In Chapter 4 we highlighted the potential for market failure in allocating fixed capital, one reason being the difficulty of investment decision-making under uncertainty. That argument in itself may not be enough to convince doubters of the case for a negative bias to capital investment. It may for example reasonably be claimed that the ‘animal spirits’
Ciaran Driver, Paul Temple
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