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Do Firms Set Free Cash Free? Misallocation vs. Opportunism in Acquisitions

Sturgess, Jason - 2012

We examine the impact of excess cash on the decision and method of payment in acquisitions. Consistent with prior literature, we find that firms that have excess cash do make more acquisitions. However, those acquisitions frequently use stock as the method of payment. We investigate this finding...

Persistent link: https://www.econbiz.de/10013116318

The Dark Side of Diversity : An Empirical Examination of the Impact of Firm Diversity on Resource Allocation Efficiency in Multidivisional Firms

Tag, Mehmet - 2023

resource allocation efficiency to three forms of firm-level diversity: diversity in industry-specific knowledge, diversity in … multidivisional firms shows that resource allocation efficiency tends to decrease as diversity in either industry-specific knowledge … diversity in industry-specific investment opportunities and allocation efficiency weakens and may even turn positive when the …

Persistent link: https://www.econbiz.de/10014254535

Efficiency of Resource Allocation in Multibusiness Firms : Theory and Evidence

Tag, Mehmet - 2023

This chapter reviews the theoretical and empirical literature on the efficiency of resource allocation in multibusiness … firms. The chapter proceeds by discussing the differences between resource allocation in markets vs. firm hierarchies in … section 2. This discussion establishes the costs and benefits of internal resource allocation (i.e., allocation in …

Persistent link: https://www.econbiz.de/10014257331

Takeovers and Endogenous Labor Reallocation

Agrawal, Ashwini K. - 2019

selection: job search activity for employees of M&A targets begins to increase ten months prior to a takeover announcement. In …

Persistent link: https://www.econbiz.de/10012888874

Public bank guarantees and allocative efficiency

Gropp, Reint; Güttler, André; Saadi, Vahid - 2015

lawsuit, to identify the real effects of these guarantees on the allocation of credit (“allocative efficiency”). Using matched …

Persistent link: https://www.econbiz.de/10011286412

Capital Misallocation During the Great Recession

Di Nola, Alessandro - 2017

In this paper I evaluate the contribution of financial frictions in explaining the drop in aggregate TFP through misallocation during the Great Recession. I build a quantitative model with heterogeneous establishments; with the help of the model I compute the counterfactual drop in...

Persistent link: https://www.econbiz.de/10012948234

Constrained-Efficient Capital Reallocation

Lanteri, Andrea; Rampini, Adriano A. - 2021

We characterize efficiency in an equilibrium model of investment and capital reallocation with heterogeneous firms facing collateral constraints. The model features two types of pecuniary externalities: collateral externalities, because the resale price of capital affects collateral constraints,...

Persistent link: https://www.econbiz.de/10013241848

Investing in Misallocation

Kilic, Mete; Tuzel, Selale - 2023

We document that 20% of Compustat firms have above-median investment rates despite having below-median marginal product of capital (MPK), seemingly "misallocating" productive resources. These firms are typically younger and significantly more likely to experience a substantial upward jump in...

Persistent link: https://www.econbiz.de/10014354150

Misallocation of Debt and Aggregate Productivity

Kim, Hwagyun; Mathur, Vipul; Shin, Jong Kook; … - 2022

We propose an accounting framework that maps the dispersion of borrowing costs along the debt maturity structure to the misallocation of productive resources. Specif- ically, we decompose the effects of credit misallocation into two distinct channels: limited access to debt finance (scale...

Persistent link: https://www.econbiz.de/10013306569

Expansionary Monetary Policy and Credit Misallocation : Evidence from China

Cai, Yue - 2020

the credit and investment allocation among firms after controlling for the simultaneous fiscal stimulus. We utilized the …

Persistent link: https://www.econbiz.de/10012847837