Hau, Harald; Lai, Sandy - In: Journal of Financial Economics 108 (2013) 2, pp. 392-408
This paper provides evidence for a causal effect of equity prices on corporate investment and employment. We use fire … whose stocks are most underpriced have considerably lower investment and employment than industry peers not subject to any … fire sale discount. The causal effect of underpricing on investment is found to be largely concentrated on the most …