Managerial Investment And Firm Value: Statistical Investigation Of Their Relationship

Abstract

In the modern neoclassical microeconomic theory, as it is build on Walrasian, Hicksian, and partly- and eclectically- on Marshallian lines, the firm does not exist but as a necessary entity in the framework of the prices formation. No evidence and explanation is given on the creation and functioning of the firm and the changes in the firm structure. In this study we shall try to outline the way that the prevailing microeconomic theory faces the firm. Then we shall present some alternative/complementary considerations on the nature of the management of the firm, pertaining to the ownership and control relations in the firm, namely in what measure the managers in the modern large corporation act for themselves and not to the interest of the shareholders. A statistical investigation follows, referring to the measure in which these alternative theories are supported by available statistical evidence.