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Kraft, Holger - 2013

(average) Tobin's Q increases with firm-level volatility. The significance mainly comes from R&D firms, which have more growth … options than non-R&D firms. By decomposing firm-level volatility into its systematic and unsystematic part, we document that … only idiosyncratic volatility has a significant effect on valuation. Second, we analyze the relation of stock returns to …

Persistent link: https://www.econbiz.de/10013085928

The Global Rise of Corporate Saving

Chen, Peter - 2017

The sectoral composition of global saving changed dramatically during the last three decades. Whereas in the early 1980s most of global investment was funded by household saving, nowadays nearly two-thirds of global investment is funded by corporate saving. This shift in the sectoral composition...

Persistent link: https://www.econbiz.de/10012963739

Econometric Evidence on the R&D Depreciation Rate

De Rassenfosse, Gaétan - 2017

This paper presents estimates of the R&D depreciation rate using survey data on Australian inventions. Its novelty is twofold. First, it relies on direct observation of the revenue streams of inventions. This is in sharp contrast with previous studies, which all rely on models based on indirect...

Persistent link: https://www.econbiz.de/10012964898

Pledgeability, Industry Liquidity, and Financing Cycles

Diamond, Douglas W. - 2017

Why do firms choose high debt when they anticipate high valuations, and underperform subsequently? We propose a theory of financing cycles where the importance of creditors' control rights over cash flows (“pledgeability”) varies with industry liquidity. The market allows firms take on more...

Persistent link: https://www.econbiz.de/10012965425

Governance and Stakeholders

Mehrotra, Vikas C. - 2017

Economic models routinely assume firms maximize shareholder wealth; however common law legal systems only require that officers and directors pursue the interests of the corporation, leaving this ill-defined. Economic arguments for shareholder wealth maximization derived from shareholders'...

Persistent link: https://www.econbiz.de/10012954931

Innovative Originality, Profitability, and Stock Returns

Hirshleifer, David A. - 2017

We propose that innovative originality (InnOrig) is a valuable organizational resource, and that owing to limited investor attention and skepticism of complexity, firms with greater InnOrig are undervalued. We find that firms' InnOrig strongly predicts higher, more persistent, and less volatile...

Persistent link: https://www.econbiz.de/10012955455

The Dark Side of Outside Directors : Do They Quit When They are Most Needed?

Fahlenbrach, Rüdiger - 2015

Outside directors have incentives to resign to protect their reputation or to avoid an increase in their workload when they anticipate that the firm on whose board they sit will perform poorly or disclose adverse news. We call these incentives the dark side of outside directors. We find strong...

Persistent link: https://www.econbiz.de/10013038902

Government Guarantees and the Valuation of American Banks

Atkeson, Andrew - 2018

Banks' ratio of the market value to book value of their equity was close to 1 until the 1990s, then more than doubled during the 1996-2007 period, and fell again to values close to 1 after the 2008 financial crisis. Sarin and Summers (2016) and Chousakos and Gorton (2017) argue that the drop in...

Persistent link: https://www.econbiz.de/10012916621

Selection Versus Talent Effects on Firm Value

Chang, Briana - 2018

Measuring the value of labor-market hires for stock prices, be it underwriters when firms go public (IPOs) or chief executive officers (CEOs), is difficult due to selection. Opaque firms with higher costs of capital benefit more from prestigious underwriters, while productive firms benefit more...

Persistent link: https://www.econbiz.de/10012917596

Big Data in Finance and the Growth of Large Firms

Begenau, Juliane - 2018

One of the most important trends in modern macroeconomics is the shift from small firms to large firms. At the same time, financial markets have been transformed by advances in information technology. We explore the hypothesis that the use of big data in financial markets has lowered the cost of...

Persistent link: https://www.econbiz.de/10012920369