Clayton, Matthew J. and Jorgensen, Bjorn N. (2011) Corporate equity ownership, investment, and product market relationships. Journal of Corporate Finance, 17 (5). pp. 1377-1388. ISSN 0929-1199
Full text not available from this repository.Abstract
This paper examines the effect of corporate equity ownership on investment when firms have product market relationships. Firms have incentives to hold long equity positions when their products are complements. These equity positions induce the firms to increase their real investment expenditures. In contrast, firms have incentives to hold short equity positions when their products are substitutes. These short positions commit the firms to a more aggressive product market stance, and also result in increased real investment expenditures. Our model offers an explanation for the empirical relationship between the establishment of corporate equity stakes and increased investment spending documented by Allen and Phillips (2000).
| Item Type: | Article |
|---|---|
| Official URL: | http://www.sciencedirect.com/science/journal/09291... |
| Additional Information: | © 2011 Elsevier B.V. |
| Divisions: | Accounting |
| Subjects: | H Social Sciences > HG Finance |
| JEL classification: | D - Microeconomics > D4 - Market Structure and Pricing > D43 - Oligopoly and Other Forms of Market Imperfection G - Financial Economics > G3 - Corporate Finance and Governance > G31 - Capital Budgeting; Fixed Investment and Inventory Studies G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets |
| Date Deposited: | 18 Jul 2013 15:21 |
| Last Modified: | 12 Dec 2024 00:01 |
| URI: | http://eprints.lse.ac.uk/id/eprint/50681 |
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