1. Fiscal monitoring and corporate investment.
- Author
-
Knust, Lucas and Oesch, David
- Subjects
CORPORATE investments ,STOCK repurchasing ,DEBT relief ,LOCAL government ,FISCAL policy ,RESEARCH & development - Abstract
Does state fiscal monitoring of local governments impact firms? Exploiting the staggered adoption of state fiscal monitoring policies, our results show that state fiscal monitoring of local governments increases corporate investment. Affected firms increase their investment by increasing capital expenditures as well as research and development expenditures. Additional analyses reveal that firms fund this increase in investment by decreasing share repurchases and issuing debt. We also provide evidence that the increase in corporate investment is driven by a reduction in local corruption. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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