The Association Between Performance Plan Adoption and Corporate Capital Investment : A Note  

Oleh:

Gaver, Jennifer J. ; Gaver, Kenneth M.

Jenis: Article from Bulletin/Magazine
Dalam koleksi: Journal of Management Accounting Research vol. 5 (1993), page 145-158.
Topik: PLANNING; association; performance plan; adoption; corporate capital investment

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ36.1 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

This study is a large sample replication of previous work by Larcker [1983], which investigates changes in corporate capital investment associated with the adoption of a performance plan. The sample consists of 204 firms that adopted performance plans between 1971 and 1980, and 204 nonadopting firms matched to experimental firms on the basis of industry membership. In contrast to Larcker's findings, which are based on 25 matched pairs of adopting and nonadopting firms, the results of this study provide little evidence that capital spending increases following adoption. Larcker also speculated that performance plans, as options on the firms' accounting results, encourage managers to pursue risky investment strategies. However, a significant decrease in average systematic risk (asset beta) following adoption is observed in this study. Relative to the original findings of Larcker, the results reported here are less supportive of the proposition that performance plans influence managerial decisions.

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