Nonlinear Models in Corporate Finance Research: Review, Critique, and Extensions
AbstractSince the work of Morck, Shleifer and Vishny (1988), nonlinear model specification has gained more attention in corporate finance research. In this paper, we provide a detailed review of the previous studies that have examined nonlinear relations in corporate finance. We review the theory and evidence in these studies and discuss the advantages and disadvantages of the various methodologies used to detect nonlinearity. We also suggest two possible methodological extensions, which we apply in the empirical analysis of R&D investment and firm value.
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Bibliographic InfoArticle provided by Springer in its journal Review of Quantitative Finance and Accounting.
Volume (Year): 22 (2004)
Issue (Month): 2 (03)
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Web page: http://springerlink.metapress.com/link.asp?id=102990
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- Yu, Hai-Chin & Sopranzetti, Ben J. & Lee, Cheng-Few, 2012. "Multiple banking relationships, managerial ownership concentration and firm value: A simultaneous equations approach," The Quarterly Review of Economics and Finance, Elsevier, vol. 52(3), pages 286-297.
- Florackis, Chrisostomos & Kostakis, Alexandros & Ozkan, Aydin, 2009. "Managerial ownership and performance," Journal of Business Research, Elsevier, vol. 62(12), pages 1350-1357, December.
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