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The main purpose of this study is to investigate the relative advantages and disadvantages of first-mover hypotheses by examining the role of entry timing in the announcement effects of corporate capital investment. Our empirical results suggest that those firms first announcing their capital investment will experience greater share-price effects than the followers in the same industry. In addition, the financial analysts tend to revise upward their announcement-period earnings forecasts for those capital investment announcers, suggesting that announcements of capital investment convey positive information about the earnings prospects of the announcing firms. Furthermore, analysts' revisions of earnings forecasts subsequent to such announcements are more favorable for leading-announcer firms than the followers. Overall, our findings provide fully support for the first-mover advantages hypothesis, indicating the importance of the entry timing when announcing a corporate capital investment.

Building upon two competing hypotheses, the 'efficient investment' hypothesis and the 'internal capital markets' hypothesis, we set out in this study to examine the role of organizational form, in terms of 'focus' versus 'diversification', in explaining the long-run stock and operating performance following corporate R&D expenditure. In a sample of 165 announcements of increases in R&D expenditure, we find that focused announcing firms experience significantly greater long-run stock and operating performance following R&D investment, as compared to diversified announcing firms. Our findings are robust to different methods of generating long-run stock performance, various measures of operating performance and alternative benchmarks for the calculation of abnormal performance. Overall, our results provide convincing evidence to suggest that the 'efficient investment' hypothesis dominates the 'internal capital markets' hypothesis.