The Information Content of Just-in-Time Inventory System Adoption Announcement |
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| Authors: | Shawn D Howton Eric James Higgins & Timothy B Biggart |
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| Institution: | Villanova University, USA,;Drexel University, USA,;University of North Carolina, USA |
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| Abstract: | This paper examines the stock market reaction and analysts' earnings forecast revisions associated with just-in-time (JIT) inventory system adoption announcements. The stock market reaction is positive, however, analysts do not revise their earnings forecasts when firms announce a JIT adoption. The results of the paper show mixed support for the hypothesis that JIT is viewed by markets as a costly capital expenditure intended to increase the net cash flows of the firm and mixed support for the hypothesis that JIT is viewed by markets only as an accounting change. |
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| Keywords: | JIT inventory earnings market announcement |
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