Academic Activities
[Research]Investment Decisions in Anticipation of Recessions and Outperformance of Pre-Acting Firms
2017.02.01 Views 703 경영학연구분석센터
Emerging Markets Finance and Trade
Volume 53, Issue 2, 1 February 2017, Pages 321-338
Chee, S., Kwon, S.Y., Pyun, J.H.
Korea University Business School, Seoul, South Korea
http://www.tandfonline.com/toc/mree20/53/2?nav=tocList
Abstract
We empirically examine whether firms make investment decisions in anticipation of recessions and subsequently perform better. Using a large quarterly dataset of fixed asset investments for U.S. firms during 1984–2012, we show that not all firms efficiently adjust their investment decisions in anticipation of a recession. However, we find that pre-acting firms that properly adjust their investment decisions (i.e., underinvest) before a recession outperform re-acting firms that fail to make proper investment decisions (i.e., overinvest) before a recession in subsequent returns on assets, returns on investments, and market-adjusted return measures. Copyright © Taylor & Francis Group, LLC.
Author keywords
Expansion
investment decisions
overinvestment
recession
underinvestment
Volume 53, Issue 2, 1 February 2017, Pages 321-338
Chee, S., Kwon, S.Y., Pyun, J.H.
Korea University Business School, Seoul, South Korea
http://www.tandfonline.com/toc/mree20/53/2?nav=tocList
Abstract
We empirically examine whether firms make investment decisions in anticipation of recessions and subsequently perform better. Using a large quarterly dataset of fixed asset investments for U.S. firms during 1984–2012, we show that not all firms efficiently adjust their investment decisions in anticipation of a recession. However, we find that pre-acting firms that properly adjust their investment decisions (i.e., underinvest) before a recession outperform re-acting firms that fail to make proper investment decisions (i.e., overinvest) before a recession in subsequent returns on assets, returns on investments, and market-adjusted return measures. Copyright © Taylor & Francis Group, LLC.
Author keywords
Expansion
investment decisions
overinvestment
recession
underinvestment