Is Investment-Cash Flow Sensitivity Caused by Agency Costs or Asymmetric Information? Evidence from the UK
研究英国上市公司投资对现金流的敏感性，发现主要由自由现金流的代理成本导致，而非信息不对称；内部人持股非线性影响该敏感性，外部大股东通过有效监督降低之。
We investigate the investment-cash flow sensitivity of a large sample of the UK listed firms and confirm that investment is strongly cash flow-sensitive.Is this suboptimal investment policy the result of agency problems when managers with high discretion overinvest, or of asymmetric information when managers owning equity are underinvesting if the market (erroneously) demands too high a risk premium?We find that the observed cash flow sensitivity results mainly from the agency costs of free cash flow.The magnitude of the relationship depends on insider ownership in a nonmonotonic way.Furthermore, we obtain that outside blockholders, such as financial institutions, the government, and industrial firms (only at high control levels), reduce the cash flow sensitivity of investment via effective monitoring.Finally, financial institutions appear to play a role in mitigating informational asymmetries between firms and capital markets.We corroborate our findings by performing additional tests based on the stochastic efficient frontier approach and power indices.