earticle

영어

We examine the long-run financial performances of stock returns, operating performance, and Tobin’s Q before and after firms’ capital investments in Korea. This paper reports that companies exhibit no significant relation between capital investments and subsequent financial performance not only for the whole sample but also for the sub-sample classified by firm’s motives of the capital investments. These empirical results are not consistent with existing evidence found in the United States (Titman, Wei and Xie 2004; Cooper, Gulen and Schill 2008) but consistent with the evidence found in the Japan (Titman, Wei and Xie 2009). Therefore, this paper appears to suggest that cross-country differences in political, economical, financial, and cultural factors play a crucial role in explaining the variation of financial performance.