Free cash flow, debt-monitoring and managers' LIFO/FIFO policy choice

Journal of Corporate Finance

Volumn 7, Issue 4, 2001, Pages 475-492

  Gul, Ferdinand A ^a  

^a CITY UNIVERSITY OF HONG KONG   (Hong Kong)

Author keywords

Debt monitoring; Free cash flow; Growth opportunities; Inventory accounting method; L84; M40

Indexed keywords

EID: 0041905584     PISSN: 09291199     EISSN: None     Source Type: Journal    
DOI: 10.1016/S0929-1199(01)00037-2     Document Type: Article

References (38)

1. Abdel-Khalik A.R. The effect of LIFO switching and firm ownership on executives' pay. Journal of Accounting Research. 23:1985;427-447.
2. Agrawal A., Jayaraman N. The dividend policies of all-equity firms: a direct test of the free cash flow theory. Managerial and Decision Economics. 15:1994;139-148.
3. Baber R.B., Janakiraman S.N., Kang S.H. Investment opportunities and the structure of executive compensation. Journal of Accounting and Economics. 21:1996;297-318.
4. Biddle G.C. Accounting methods and management decisions: the case of inventory costing and inventory policy. Journal of Accounting Research. 18:1989;235-280.
5. Cattrell R.B. The Scree test for the number of factors. Multivariate Behavioral Research. 1:1966;245-276.
6. Christie A.A., Zimmerman J.L. Efficient and opportunistic choices of accounting procedures: corporate control contests. The Accounting Review. 69:1994;539-566.
7. Cushing B.E., LeClere M.J. Evidence on the determinants of inventory policy choice. The Accounting Review. 67:1992;355-366.
8. DeAngelo L.E. Managerial competition, information costs, and corporate governance: the use of accounting performance measures in proxy contests. Journal of Accounting and Economics. 10:1988;3-36.
9. DeAngelo L.E. Equity valuation and corporate control. The Accounting Review. 65:1990;93-112.
10. Demsetz H., Lehn K. The structure of corporate ownership: Causes and consequences. Journal of Political Economy. 1985;1155-1177. Spring.
11. Dopuch N., Pincus M. Evidence on the choice of inventory accounting methods: LIFO versus FIFO. Journal of Accounting Research. 26:1988;28-59.
12. Gaver J.J., Gaver K.M. Additional evidence on the association between the investment opportunity set and corporate financing, dividend and compensation policies. Journal of Accounting and Economics. 16:1993;125-160.
13. Gul F.A., Tsui J. A test of the free cash flow and debt monitoring hypotheses: evidence from audit pricing. Journal of Accounting and Economics. 24:1998;219-237.
14. Harman H.H. Modern Factor Analysis. 3rd edn. 1976;University of Chicago Press, Chicago, IL.
15. Harris M., Raviv A. Capital structure and the informational role of debt. Journal of Finance. 45:1990;321-349.
16. Healy P.M., Kang S.H., Palepu K.G. The effect of accounting procedure changes on CEOs' cash salary and bonus compensation. Journal of Accounting and Economics. 9:1987;7-34.
17. Hunt H. Potential determinants of corporate inventory accounting decisions. Journal of Accounting Research. 23:1985;448-467.
18. Jensen M.C. Agency costs of free cash flow, corporate finance and takeovers. American Economic Review. 76:1986;323-339.
19. Jensen M.C. Eclipse of the public corporation. Harvard Business Review. 5:1989;61-74.
20. Jensen M.C. The modern industrial revolution, exit, and the failure of internal control systems. Journal of Finance. 1993;831-880. July.
21. Lang L.H.P., Stulz R.M., Walkling R.A. A test of the free cash flow hypothesis, the case of bidder returns. Journal of Financial Economics. 29:1991;315-335.
22. Lee C.J., Hsieh D. Choice of inventory accounting methods: comparative analysis of alternative hypothesis. Journal of Accounting Research. 1985;468-485. Autumn.
23. Lehn K., Poulsen A. Free cash flow and stockholder gains in going private transactions. The Journal of Finance. 1989;771-787. July.
24. Maloney M.T., McCormick R.E., Mitchell M.L. Managerial decision making and capital structure. Journal of Business. 66:1993;189-217.
25. Mason S.P., Merton R.C. The role of contingent claims analysis in corporate finance. Altman E.I. Recent Advances in Corporate Finance. 1985;7-54 Irwin, Homewood, IL.
26. Morse D., Richardson G. The LIFO/FIFO decision. The Journal of Accounting Research. 21:1983;106-127.
27. Murphy K.J., Zimmerman J.L. Financial performance surrounding CEO turnover. Journal of Accounting and Economics. 16:1993;273-315.
28. Myers S. Determinants of corporate borrowing. Journal of Financial Economics. 5:1977;147-175.
29. Niehaus G.R. Ownership structure and inventory method choice. The Accounting Review. 64:1989;269-284.
30. Rubin P.H. Managing Business Transactions. 1990;The Free Press, Maxwell Macmilian International, New York.
31. Smith C.W. Jr., Watts R.L. The investment opportunity set and corporate financing, dividend and compensation policies. Journal of Financial Economics. 32:1992;263-292.
32. Shleifer A., Vishny R.W. Management entrenchment, the case of manager-specific investments. Journal of Financial Economics. 25:1989;123-139.
33. Skinner D. The investment opportunity set and accounting procedure choice: preliminary evidence. Journal of Accounting and Economics. 16:1993;407-445.
34. Stulz R.M. Managerial discretion and optimal financing policies. Journal of Financial Economics. 26:1990;3-27.
35. Warner J.B., Watts R.L., Wruck K.H. Stock prices and top management changes. Journal of Financial Economics. 20:1988;461-492.
36. Weisbach M.S. Outside directors and CEO turnover. Journal of Financial Economics. 20:1988;431-460.
37. White G.I., Sondhi A.S., Fried D. Analysis and Use of Financial Statements. 1994;Wiley, New York.
38. Wilson P.W., Christensen K.E. LIFO for Retailers: A Business, Financial and Tax Guide. 1985;Wiley, New York.