search query: @author Pindado, J. / total: 6
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| Author: | Morgado, A. Pindado, J. |
| Title: | The underinvestment and overinvestment hypotheses: an analysis using panel data |
| Journal: | European Financial Management
2003 : JUN, VOL. 9:2, p. 163-177 |
| Index terms: | Company value Investment |
| Language: | eng |
| Abstract: | The relationship between company value and investment is studied to test the underinvestment and overinvestment hypotheses. The results were obtained using panel data methodology as the estimation method and they indicate that the relation is quadratic, which implies that there exists an optimal level of investment. Consequently, companies that invest less than the optimal level suffer from an underinvestment problem, while those investing more than the optimum suffer from overinvestment. |
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