Grow th opportunit y signaled by increasing capital expenditurewould enhance f irm value as revealed by relevant studies (McConnel l& Muscarella, 1985; Morck et al ., 1988; McConnell & Servaes, 1990;Demsetz & Villalonga, 2001 , Jin & Jorion , 2006) Thus, we use theratio, capital expenditure over total assets, as the proxy for growthopportunity.
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