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Managerial Skewness Preference and the Allocation of Corporate Resources in Internal Capital Markets
2012
Social Science Research Network
This article examines the relationship between skewness and capital allocation in conglomerate firms. Using Compustat segments data we document that small segments in industries with high expected skewness have higher capital spending as a fraction of segment assets than other segments in the conglomerate or comparable stand-alone firms. We show that this pattern is not easily explained by standard versions of either the "bright-side"-view or the "dark-side"-view of internal capital markets.
doi:10.2139/ssrn.1992151
fatcat:cdmfcgx5tfep5ggk27rj3bsv4u