Olivia DrakeA paper titled "Corporate Capital Budgeting Decisions and Information Sharing" by Abigail Hornstein, assistant professor of economics, was published in the Journal of Economics and Management Strategy on Oct. 24. In the paper, Hornstein explains how firms must overcome agency and information asymmetry problems to make efficient corporate capital budgeting decisions; this is particularly true for firms with multiple units dispersed across geographic locations. Internal communication and coordination may therefore be crucial in reducing information asymmetry and achieving efficient resource allocation. We examine the relationship between corporate capital budgeting decisions and the degree of internal information sharing using a data set…
Abigail Hornstein, assistant professor of economics, is the author of “Where A Contract Is Signed Determines Its Value: Chinese Provincial Variation in Utilized vs. Contracted FDI Flows,” published in the March 2011 edition of the Journal of Comparative Economics, 39(1). In the article, Hornstein explains how there are major differences between ex ante corporate investment plans and ex post investments. The case of China is useful for understanding this problem because there is substantial time series and cross sectional variation in the ratio of utilized to contracted FDI (UC ratio), which is less than one in most province-year observations. Provinces…
Abigail Hornstein, assistant professor of economics, chaired a session and presented her papers "Where A Contract Is Signed Determines Its Value: Chinese Provincial Variation In Utilized vs. Contracted FDI Flows" and "Corporate Capital Budgeting Decisions and Information Sharing" (the second of these co-authored with Minyuan Zhao) at the International Industrial Organization Conference at Northeastern University on April 4.