Blame No One? Investment Decisions Of The Polish Stock-listed Companies

It is often raised that enterprises in transition countries are cursed with credit constraints and insufficient capital. Regardless of whether this belief holds for the whole of the economy, the Agency Theory provides a useful theoretical as well as empirical framework helping to verify the efficiency of investment decisions in the case of companies for which 'objective' future cash-flow valuation is available. The assertion of managerial discretion has been verified empirically for many different countries with the analytical background provided by user cost of capital and Tobin's Q theories. This paper’s contribution is the analysis of the Polish stock-listed companies behaviour with the particular attention devoted to the corporate governance issues. We find that on average these companies overinvest relative to their opportunities, while this phenomenon is more severe in the case of even partial state ownership.