The paper, "Capital Allocation by Public and Private Firms," examines how differences in organizational form (public versus private) impact a firm's investment policy. It compares the investment policies of public and private firms in different institutional settings to conclude that in countries with well-developed stock markets, public firms are better positioned to take advantage of growth opportunities than private firms. The relative advantage public firms have at allocating capital, however, depends on the degree of agency costs and reliance on external equity.

The Journal of Financial and Quantitative Analysis publishes theoretical and empirical research in financial economics. Topics covered include corporate finance, investments, capital and security markets and quantitative methods of particular relevance to financial researchers.

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