Full-text source: WilsonSelect

Jensen (1986) argues that managers will invest free cash flow in wasteful investments rather than pay it out to shareholders. The potential agency costs of R&D investments are arguably higher, therefore, for high-free-cash-flow firms. ... (Jensen and Meckling, 1976) and information signaling (Leland and Pyle, 1977). A dummy variable for the ... ................
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