The Future Performance of Capital Expenditure Leaders and Followers

• Main Authors: Yu-Han Chien, 簡玉涵
• Other Authors: Yang-Pin Shen
• Format: Others
• Language: en_US
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/32484827114275743394

碩士 === 元智大學 === 財務金融學系 === 97 === In this study, I investigate the characteristics of capital expenditure leaders and followers and examine the relationship between capital expenditure and future performance, which includes stock valuation, operating performance and risk volatility in the long term. Firms with the capital expenditure intensity larger than (less than or equal to) that of the industry value-weighted are classified as Leaders (Followers). The performance improvement of leaders is larger than followers’ and exhibit continued growth, higher potential profitability and less risk volatility. Different dimension for the connection of corporate capital spending which different with industry trend and their future performance is also discussed. The same tendency means that the company and the industry both simultaneously increase or decrease investment; while the adverse tendency means that the company increase (decrease) in capital investment when most industry firms decrease (increase). The future performance of adverse tendency capital expenditure is more uncertain due to the result is influenced by considering sales scale or not. Overall, capital expenditure leaders help company exhibit future potential profitability and better growth opportunities.