 Eliciting managerial willingness to invest: A revealed-preference approachQiang Kang and Qiao Liu Journal of Business Research, 2023, vol. 155, issue PB Abstract: Decision-making entails two underlying economic forces – capacity and willingness of taking on the subject under considerations. Capacity reflects available opportunities and typically weighs benefits against costs of the decision. Willingness pertains to the decision maker’s tolerance for the risk associated with this decision. Compared to capacity, willingness is arguably more primal and much harder to quantify. Our study illustrates a way to divulge managerial willingness by applying a revealed-preference approach toward a large sample of U.S. firms’ investment decisions in the setting of staggered passages of U.S. state antitakeover laws. Our results suggest that takeover threats suppress managerial desire to invest and that governments play a vital role in affecting managerial risk preference, and in turn, corporate strategic choices. Our approach, with modifications and refinements, has the potential of a broad application toward understanding how and under what conditions managerial willingness affects the decision-making processes. Keywords: Managerial willingness to invest; Investment Euler equation; Generalized method-of-moments estimator; State antitakeover laws; Capital expenditure; Acquisitions and/or R&D (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:155:y:2023:i:pb:s0148296322008402 DOI: 10.1016/j.jbusres.2022.113375 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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