Over-Investment of Free Cash Flow during CEO’s Tenure - Technology and Investment

TI > Vol.7 No.3, August 2016

Over-Investment of Free Cash Flow during CEO’s Tenure ()

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DOI: 10.4236/ti.2016.73007 2,765 Downloads 5,098 Views Citations

Author(s)

Xia Jiang

Affiliation(s)

College of Management, Jinan University, Guangzhou, China.

ABSTRACT

This paper examines the relationship between CEO’s tenure and their firm’s investment efficiency. Over-investment is greater in the early years than in the later years of CEO’s service. Consistent with prior literature, the results also suggest over-investment increases with firm’s internally-generated cash flow.

KEYWORDS

Over-Investment, Free Cash Flow, Tenure

Share and Cite:

Jiang, X. (2016) Over-Investment of Free Cash Flow during CEO’s Tenure. Technology and Investment, 7, 51-58. doi: 10.4236/ti.2016.73007.

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