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We examined the effect of institutional quality and firm-specific factors on corporate investment in Nigeria using fifty-four (54) quoted non-financial firms within the period of 2002-2012. We applied dynamic panel estimator proposed by Arellano-Bond (1991). The results showed that regulatory quality, corruption, political stability and control of corruption have insignificant effect in determining corporate investments in Nigeria. Our results also confirmed that firms' firm-specific factors influenced corporate investment in Nigeria. While firms' cash flow displayed positive and significant effect on investment other factors had negative effects on investment.Our results showed that investment is constrained to internally generated fund, despite the existence of capital market. In addition, the spillover effect of tightening monetary policy during the period of study had increased the cost of borrowing thereby having a negative effect on investment in the real sector. We recommended that when the monetary authorities are focusing on inflation targeting, they should also not lose sight of its impact on corporate investment and other productivity growth of firms; which is the source of long term sustainable growth and development of economies.

This paper analyses how firm-specific forecast errors derived from survey data of German manufacturing firms over 2007–2011 affect firms' investment propensity. Understanding how forecast errors affect firm investment behaviour is key to mitigate economic downturns during and after crisis periods in which forecast errors tend to increase. Our findings reveal a negative impact of absolute forecast errors on investment. Strikingly, asymmetries arise depending on the size and direction of the forecast error. The investment propensity declines if the realised situation is worse than expected. However, firms do not adjust investment if the realised situation is better than expected suggesting that the uncertainty component of the forecast error counteracts positive effects of unexpectedly favorable business conditions. Given that the fraction of firms making positive forecast errors is higher after the peak of the recent financial crisis, this mechanism can be one explanation behind staggered economic growth and slow recovery following crises.

Whereas capability differences are known to impact governance decisions, what drives heterogeneity in firm capabilities? We propose that capability differences may arise from governance choices related to the focal activity and study how firms accumulate capabilities in the firm-specific, industry-specific, and occupational human capital necessary to perform knowledge work. We theorize that prior outsourcing decisions influence the development of firm- and industry-specific human capital and that buyer–supplier differences in the management of skilled employees can produce systematic differences in capabilities based on occupational human capital. Additionally, we explore some contingencies in the development of these types of human capital and their impacts on outsourcing knowledge work. These propositions are tested with a unique data set on the outsourcing of legal work involved in filing patents (i.e., patent prosecution).

AbstractOur selection and endogeneity corrected findings suggest that firms' political connections negatively influence their market value. We find that firms with a larger size, more operationally efficient in utilizing their assets, and those operating in more concentrated industries benefit more from the political connections than the otherwise corresponding firms. We also report that political connections do not influence firms' leverage choices. However, we find that politically connected firms with higher leverage have significantly lower market value. Further, we note that political connections help the firms operating in unregulated but more concentrated industries, probably to obtain 'private benefits', leading to their higher market value. Overall, our results indicate that the effect of political connections is not homogeneous across the sample firms. They also raise questions on the motivation of sample firms' political connections, suggesting that these firms probably obtain political connections for reasons other than enhancing their market value.