We find a negative relation between abnormal investment and future stock performance. Such is mainly driven by under-investment, not over-investment. Our results are robust to various estimation methods models. Both delayed market reaction agency issues may lead the apparently anomalous return predictability of under-investment. First, investors react promptly fundamental information contained ...

We view director tenure as an indicator of a firm's stability. Longer board indicates that shareholders are satisfied with their appointments, the has relevant mix capital, it is effective at monitoring and advising management, firm unlikely to face operational strategic problems require drastic changes its board. Using broad sample up 3800 firms over 20-year period, we show longer have higher ...