Home About Latest Browse RSS Advanced Search

Board of Governors of the Federal Reserve System (U.S.)
Finance and Economics Discussion Series
The Long and Short of It : Do Public and Private Firms Invest Differently?
Naomi E. Feldman
Laura Kawano
Elena Patel
Nirupama Rao
Michael Stevens
Jesse Edgerton
Abstract

Using data from U.S. corporate tax returns, which provide a sample representative of the universe of U.S. corporations, we investigate the differential investment propensities of public and private firms. Re-weighting the data to generate observationally comparable sets of public and private firms, we find robust evidence that public firms invest more overall, particularly in R&D. Exploiting within-firm variation in public status, we find that firms dedicate more of their investment to R&D following IPO, and reduce these investments upon going private. Our findings suggest that public stock markets facilitate greater investment, on average, particularly in risky, uncollateralized investments.


Download Full text
Cite this item
Naomi E. Feldman & Laura Kawano & Elena Patel & Nirupama Rao & Michael Stevens & Jesse Edgerton, The Long and Short of It : Do Public and Private Firms Invest Differently?, Board of Governors of the Federal Reserve System (U.S.), Finance and Economics Discussion Series 2018-068, 28 Sep 2018.
More from this series
JEL Classification:
Subject headings:
Keywords: Corporate governance ; Investment ; Public firms
DOI: 10.17016/FEDS.2018.068
For corrections, contact FRB Librarian ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal