Showing 1 - 10 of 593
A large amount of activity in the financial sector occurs in secondary financial markets, where securities are traded among investors without capital flowing to firms. The stock market is the archetypal example, which in most developed economies captures a lot of attention and resources. Is the...
Persistent link: https://www.econbiz.de/10009403420
Interpreting accruals as working capital investment, we hypothesize that firms rationally adjust their investment to respond to discount rate changes. Consistent with the optimal investment hypothesis, we document that (i) the predictive power of accruals for future stock returns increases with...
Persistent link: https://www.econbiz.de/10005828684
We develop a new approach to dealing with real options problems with uncertain maturity. This type of situation is typical for R&D investments and mine or oil exploration projects. These types of projects are characterized by significant on-going investment costs until completion. Since time to...
Persistent link: https://www.econbiz.de/10005719947
This paper links the impending vesting of CEO equity to reductions in real investment. Existing studies measure the manager's short-term concerns using the sensitivity of his equity to the stock price. However, in myopia theories, the driver of short-termism is not the magnitude of incentives...
Persistent link: https://www.econbiz.de/10010951061
We survey the theory and evidence of behavioral corporate finance, which generally takes one of two approaches. The …
Persistent link: https://www.econbiz.de/10009251520
We study a period of severe disequilibrium to investigate whether board characteristics are related to corporate investment, debt usage, and firm value. During the 1930-1938 Depression era, when the corporate sector was shocked by an unprecedented downturn, we document a relation between board...
Persistent link: https://www.econbiz.de/10009278247
We evaluate differences in investment behavior between stock market listed and privately held firms in the U.S. using a rich new data source on private firms. Listed firms invest less and are less responsive to changes in investment opportunities compared to observably similar, matched private...
Persistent link: https://www.econbiz.de/10009278252
We analyze the link between creditor rights and firms' investment policies, proposing that stronger creditor rights in bankruptcy reduce corporate risk-taking. In cross-country analysis, we find that stronger creditor rights induce greater propensity of firms to engage in diversifying...
Persistent link: https://www.econbiz.de/10008628428
We develop a model of internal governance where the self-serving actions of top management are limited by the potential reaction of subordinates. Internal governance can mitigate agency problems and ensure that firms have substantial value, even with little or no external governance by...
Persistent link: https://www.econbiz.de/10008631120
Behavioral finance models imply that an increase in shares outstanding leads to a lower stock price for firms with …
Persistent link: https://www.econbiz.de/10005777881