Title: Evidence on managerial entrenchment effects on firm value

Authors: Bernard Ben Sita; Abdallah M. Dah; Waddah Hallak

Addresses: School of Business, Lebanese American University, P.O. Box 13-5053/S-14, Chouran, Beirut 1102 2801, Lebanon ' School of Business, Lebanese American University, P.O. Box 13-5053/S-14, Chouran, Beirut 1102 2801, Lebanon ' School of Business, Lebanese American University, P.O. Box 13-5053/S-14, Chouran, Beirut 1102 2801, Lebanon

Abstract: We investigate managerial entrenchment effects on firm value. Conditioning investment and Research and Development (R&D) spending on a managerial entrenchment indicator, we find that under managerial entrenchment investment and spending tend to be higher. Under some simplifying assumptions, we find that overinvestment is greater under capital investment than under R&D spending.

Keywords: managerial entrenchment; overinvestment; Tobin's q; R&D spending; financial services management; research and development; capital investment.

DOI: 10.1504/IJFSM.2013.056313

International Journal of Financial Services Management, 2013 Vol.6 No.2, pp.93 - 104

Received: 09 May 2012
Accepted: 12 Jan 2013
Published online: 13 Sep 2014 *

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