Frictions and the Contribution of Inventory To Shareholder Wealth

Document Type

Article

Publication Date

9-2-2014

School

Finance

Abstract

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. © 2014 The Southern Finance Association and the Southwestern Finance Association.

Publication Title

Journal of Financial Research

Volume

37

Issue

3

First Page

385

Last Page

404

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