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Blame No One? Investment Decisions of the Polish Stock-listed Companies

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  • Tyrowicz, Joanna

Abstract

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 both theoretical and empirical framework helping to verify the efficiency of investment decisions in 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 behavior 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.

Suggested Citation

  • Tyrowicz, Joanna, 2007. "Blame No One? Investment Decisions of the Polish Stock-listed Companies," MPRA Paper 15199, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:15199
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    References listed on IDEAS

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    More about this item

    Keywords

    financial constraints; investments decisions; system GMM; Poland; stock-exchange; managerial discretion;

    JEL classification:

    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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