Non-financial performance in product market and capital expenditure

Li Kai Liao, Yi Mien Lin, Tsung Wen Lin

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)


This paper analyzes the antecedent conditions of capital expenditure to fill a gap in the literature. This paper argues that non-financial performance measures related to product status and product market may influence corporate capital investment decisions. Industrial product market competition also compels companies to adopt incentives for capital expenditures. This paper further describes the impact of agency costs for firms on the relationship between non-financial performance and capital expenditure, because corporate investment decision involves management discretion. In a Taiwanese sample consisting of 5815 firm-years during 2005-2012, the findings demonstrate a negative relationship between two current non-financial performance measures as follows: 1. defect-free rate and 2. market share rate and future capital expenditures. When industry faces competition pressure, a firm will not increase future capital expenditures. The agency costs may inversely affect the relationship between non-financial performance measures and future capital expenditures.

Original languageEnglish
Pages (from-to)2151-2159
Number of pages9
JournalJournal of Business Research
Issue number6
Publication statusPublished - 2016 Jun 1

All Science Journal Classification (ASJC) codes

  • Marketing


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