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Michael S Weisbach - One of the best experts on this subject based on the ideXlab platform.
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corporate liquidity management a conceptual framework and survey
Review of Financial Economics, 2014Co-Authors: Heitor Almeida, Murillo Campello, Igor Cunha, Michael S WeisbachAbstract:Ensuring that a firm has sufficient liquidity to finance valuable projects that occur in the future is at the heart of the practice of financial management. However, although discussion of these issues goes back at least to Keynes (1936), a substantial literature on the ways in which firms manage liquidity has developed only recently. We argue that many of the key issues in liquidity management can be understood through the lens of a framework in which firms face financial constraints and wish to ensure Efficient Investment in the future. We present such a model and use it to survey many of the empirical findings on liquidity management. In addition, we discuss agency-based theories of liquidity, the real effects of liquidity choices, and the impact of the 2008–2009 Financial Crisis on firms’ liquidity management.
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corporate liquidity management a conceptual framework and survey
Research Papers in Economics, 2013Co-Authors: Heitor Almeida, Murillo Campello, Igor Cunha, Michael S WeisbachAbstract:Ensuring that a firm has sufficient liquidity to finance valuable projects that occur in the future is at the heart of the practice of financial management. Yet, while discussion of these issues goes back at least to Keynes (1936), a substantial literature on the ways in which firms manage liquidity has developed only recently. We argue that many of the key issues in liquidity management can be understood through the lens of a framework in which firms face financial constraints and wish to ensure Efficient Investment in the future. We present such a model and use it to survey many of the empirical findings on liquidity management. Much of the variation in the quantity of liquidity can be explained by the precautionary demand for liquidity. While there are alternatives to cash holdings such as hedging or lines of credit, cash remains "king", in that it still is the predominate way in which firms ensure future liquidity for future Investments. We discuss theories on the choice of liquidity measures and related empirical evidence. In addition, we discuss agency-based theories of liquidity, the real effects of liquidity choices, and the impact of the 2008-9 Financial Crisis on firms' liquidity management.
Murillo Campello - One of the best experts on this subject based on the ideXlab platform.
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corporate liquidity management a conceptual framework and survey
Review of Financial Economics, 2014Co-Authors: Heitor Almeida, Murillo Campello, Igor Cunha, Michael S WeisbachAbstract:Ensuring that a firm has sufficient liquidity to finance valuable projects that occur in the future is at the heart of the practice of financial management. However, although discussion of these issues goes back at least to Keynes (1936), a substantial literature on the ways in which firms manage liquidity has developed only recently. We argue that many of the key issues in liquidity management can be understood through the lens of a framework in which firms face financial constraints and wish to ensure Efficient Investment in the future. We present such a model and use it to survey many of the empirical findings on liquidity management. In addition, we discuss agency-based theories of liquidity, the real effects of liquidity choices, and the impact of the 2008–2009 Financial Crisis on firms’ liquidity management.
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corporate liquidity management a conceptual framework and survey
Research Papers in Economics, 2013Co-Authors: Heitor Almeida, Murillo Campello, Igor Cunha, Michael S WeisbachAbstract:Ensuring that a firm has sufficient liquidity to finance valuable projects that occur in the future is at the heart of the practice of financial management. Yet, while discussion of these issues goes back at least to Keynes (1936), a substantial literature on the ways in which firms manage liquidity has developed only recently. We argue that many of the key issues in liquidity management can be understood through the lens of a framework in which firms face financial constraints and wish to ensure Efficient Investment in the future. We present such a model and use it to survey many of the empirical findings on liquidity management. Much of the variation in the quantity of liquidity can be explained by the precautionary demand for liquidity. While there are alternatives to cash holdings such as hedging or lines of credit, cash remains "king", in that it still is the predominate way in which firms ensure future liquidity for future Investments. We discuss theories on the choice of liquidity measures and related empirical evidence. In addition, we discuss agency-based theories of liquidity, the real effects of liquidity choices, and the impact of the 2008-9 Financial Crisis on firms' liquidity management.
Yue Zheng - One of the best experts on this subject based on the ideXlab platform.
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an empirical analysis of analysts capital expenditure forecasts evidence from corporate Investment efficiency
Contemporary Accounting Research, 2020Co-Authors: Jin Kyung Choi, Rebecca N Hann, Musa Subasi, Yue ZhengAbstract:We examine whether the information conveyed in a relatively new analyst research output—capital expenditure (capex) forecasts—affects corporate Investment efficiency. We find that firms with analyst capex forecasts exhibit higher Investment efficiency. This effect is stronger when the forecasts are issued by analysts with higher ability or greater industry knowledge. Moreover, the effect of capex forecasts on Investment efficiency varies with the signals they convey about future growth opportunities—positive‐growth signals are more effective in reducing underInvestment, while negative‐growth signals are more effective in reducing overInvestment. Cross‐sectional tests suggest that these effects operate at least in part through both a financing channel and a monitoring channel. Taken together, our results suggest that analysts' capex forecasts convey useful information about firms' growth opportunities to managers and investors, which can facilitate Efficient Investment. Une analyse empirique des previsions des analystes quant aux de depenses en immobilisations : donnees relatives a l'efficience des investissements des entreprises Les auteurs se demandent si les renseignements que livrent les resultats de recherches relativement recentes, concernant les previsions de depenses en immobilisations des analystes, influent sur l'efficience des investissements des entreprises. Ils constatent que les investissements des societes a l'egard desquels les analystes formulent des previsions de depenses en immobilisations affichent une efficience superieure, superiorite qui croit avec la competence ou la connaissance du secteur d'activite que possedent les analystes formulant les previsions. En outre, l'incidence des previsions de depenses en immobilisations sur l'efficience des investissements varie selon les indicateurs communiques quant aux possibilites de croissance future — les indicateurs de croissance etant davantage susceptibles de reduire le sous‐investissement lorsqu'ils sont positifs et le surinvestissement lorsqu'ils sont negatifs. Les resultats d'analyses transversales semblent indiquer que cette incidence se manifeste, a tout le moins en partie, tant par la voie du financement que par celle du suivi. Dans leur ensemble, les resultats de l'etude laissent croire que les previsions des analystes quant aux depenses en immobilisations livrent aux gestionnaires et aux investisseurs, au sujet des possibilites de croissance des societes, de l'information qui est utile et susceptible de favoriser l'efficience des investissements.
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an empirical analysis of analysts capital expenditure forecasts evidence from corporate Investment efficiency
Social Science Research Network, 2018Co-Authors: Jin Kyung Choi, Rebecca N Hann, Musa Subasi, Yue ZhengAbstract:We examine whether the information conveyed in a relatively new analyst research output — capital expenditure (capex) forecasts — affects corporate Investment efficiency. We find that firms with analyst capex forecasts exhibit higher Investment efficiency. This effect is stronger when the forecasts are issued by analysts with higher ability or greater industry knowledge. Moreover, the effect of capex forecasts on Investment efficiency varies with the signals they convey about future growth opportunities — positive-growth signals are more effective in reducing underInvestment, while negative-growth signals are more effective in reducing overInvestment. Cross-sectional tests suggest that these effects operate at least in part through both a financing channel and a monitoring channel. Taken together, our results suggest that analysts’ capex forecasts convey useful information about firms’ growth opportunities to managers and investors, which can facilitate Efficient Investment.
Heitor Almeida - One of the best experts on this subject based on the ideXlab platform.
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corporate liquidity management a conceptual framework and survey
Review of Financial Economics, 2014Co-Authors: Heitor Almeida, Murillo Campello, Igor Cunha, Michael S WeisbachAbstract:Ensuring that a firm has sufficient liquidity to finance valuable projects that occur in the future is at the heart of the practice of financial management. However, although discussion of these issues goes back at least to Keynes (1936), a substantial literature on the ways in which firms manage liquidity has developed only recently. We argue that many of the key issues in liquidity management can be understood through the lens of a framework in which firms face financial constraints and wish to ensure Efficient Investment in the future. We present such a model and use it to survey many of the empirical findings on liquidity management. In addition, we discuss agency-based theories of liquidity, the real effects of liquidity choices, and the impact of the 2008–2009 Financial Crisis on firms’ liquidity management.
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corporate liquidity management a conceptual framework and survey
Research Papers in Economics, 2013Co-Authors: Heitor Almeida, Murillo Campello, Igor Cunha, Michael S WeisbachAbstract:Ensuring that a firm has sufficient liquidity to finance valuable projects that occur in the future is at the heart of the practice of financial management. Yet, while discussion of these issues goes back at least to Keynes (1936), a substantial literature on the ways in which firms manage liquidity has developed only recently. We argue that many of the key issues in liquidity management can be understood through the lens of a framework in which firms face financial constraints and wish to ensure Efficient Investment in the future. We present such a model and use it to survey many of the empirical findings on liquidity management. Much of the variation in the quantity of liquidity can be explained by the precautionary demand for liquidity. While there are alternatives to cash holdings such as hedging or lines of credit, cash remains "king", in that it still is the predominate way in which firms ensure future liquidity for future Investments. We discuss theories on the choice of liquidity measures and related empirical evidence. In addition, we discuss agency-based theories of liquidity, the real effects of liquidity choices, and the impact of the 2008-9 Financial Crisis on firms' liquidity management.
Aaron S Edlin - One of the best experts on this subject based on the ideXlab platform.
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cadillac contracts and up front payments Efficient Investment under expectation damages
Journal of Law Economics & Organization, 1996Co-Authors: Aaron S EdlinAbstract:This article shows that up-front payments can eliminate the overInvestment effect identified by Shavell (1980), by controlling which party breaches a contract. At the same time, "Cadillac" contracts (contracts for a very high quality or quantity) can protect against underInvestment due to Williamsonian holdups. This combination provides Efficient Investment incentives when courts use expectation damages as a remedy for breach. The expectation damages remedy is therefore well-suited to multidimensional but one-sided Investment problems, in contrast to specific performance, which is well-suited to two-sided but unidimensional Investment problems. Copyright 1996 by Oxford University Press.
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cadillac contracts and up front payments Efficient Investment under expectation damages
Research Papers in Economics, 1994Co-Authors: Aaron S EdlinAbstract:This paper shows that up-front payments can play a crucial role in providing Efficient Investment incentives when contracts are incomplete. They can eliminate the overInvestment effect identified by Rogerson [1984] and Shavell [1980] when courts use an expectation damage remedy. This method extends to complex contracting situations if parties combine up-front payments with what we call 'Cadillac' contracts (contracts for a very high quality or quantity). This combination provides Efficient Investment incentives in complex contracting problems when an expectation damage remedy is accompanied by a broad duty to mitigate damages. This indicates that an expectation remedy is well-suited to multidimensional, but one-sided, Investment problems, in contrast to specific performance, which Edlin and Reichelstein [1993] showed is well-suited to two-sided, but unidimensional, Investment problems.
