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FRICTIONS AND THE CONTRIBUTION OF INVENTORY TO SHAREHOLDER WEALTH
Author(s) -
Beauchamp Charles F.,
Hardin William G.,
Hill Matthew D.,
Lawrey Chris M.
Publication year - 2014
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/jfir.12041
Subject(s) - shareholder , inventory valuation , capital (architecture) , shareholder value , business , inventory investment , economics , perpetual inventory , value (mathematics) , monetary economics , financial economics , finance , inventory management , econometrics , corporate governance , inventory theory , operations management , archaeology , machine learning , computer science , history
Shareholder wealth effects associated with inventory are examined. Initial results indicate a positive and significant relation between shareholder wealth and inventory. Additional findings suggest that operating conditions, financial constraints, and working capital behavior influence the value of inventory. These findings are consistent with tactical and strategic decisions influencing managers to hold inventory. Overall, the results suggest that shareholders price the strategic advantages accompanying inventory.