The Cross-Sectional Determinants of Corporate Capital Expenditures: A Multinational Comparison

Posted: 16 Jun 2002

See all articles by Ivo Welch

Ivo Welch

University of California, Los Angeles (UCLA); National Bureau of Economic Research (NBER)

David Wessels

University of Pennsylvania - Finance Department; Emory University - Goizueta Business School

Abstract

This study predicts cross-sectional investment (asset-normalized capital expenditures) innovations within the United States, Canada, Great Britain, (mainland) Europe, and Japan. We find that lagged stock returns are the most important cross-sectional predictors of investment increases - except in mainland Europe. American firms tend to react more than Japanese firms but less than Canadian and British firms. However, the differences between Japanese firms and U.S. firms are small. In contrast, European firms appear to conduct their investment policy without much regard for their own lagged stock performance.

Suggested Citation

Welch, Ivo and Wessels, David, The Cross-Sectional Determinants of Corporate Capital Expenditures: A Multinational Comparison. Schmalenbach Business Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=304451

Ivo Welch (Contact Author)

University of California, Los Angeles (UCLA) ( email )

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HOME PAGE: http://www.ivo-welch.info

National Bureau of Economic Research (NBER)

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David Wessels

University of Pennsylvania - Finance Department ( email )

The Wharton School
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United States
215-573-9313 (Phone)

Emory University - Goizueta Business School ( email )

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Atlanta, GA 30322-2722
United States
404-727-9091 (Phone)

HOME PAGE: http://goizueta.emory.edu/faculty/faculty_bios_temp.asp?bio_id=1535

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