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Herding dynamics in exchange groups: Evidence from Euronext
Economou, Fotini; Gavriilidis, Konstantinos; Goyal, Abhinav - In: Journal of International Financial Markets, … 34 (2015) C, pp. 228-244
This study investigates in the context of the Euronext, whether joining an exchange group affects herding in the group … of the group's member-markets and the outbreak of financial crises. We find that herding is significant post-merger in … all four constituent equity markets (Belgium, France, the Netherlands and Portugal) of the Euronext, with herding in …
Persistent link: https://www.econbiz.de/10011189487
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CEO age and the riskiness of corporate policies
Serfling, Matthew A. - In: Journal of Corporate Finance 25 (2014) C, pp. 251-273
Prior theoretical work generates conflicting predictions with respect to how CEO age impacts risk-taking behavior. Consistent with the prediction that risk-taking behavior decreases as CEOs become older, I document a negative relation between CEO age and stock return volatility. Further analyses...
Persistent link: https://www.econbiz.de/10010753534
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Does the Stock Market Harm Investment Incentives?
Asker, John; Farre-Mensa, Joan; Ljungqvist, Alexander P. - C.E.P.R. Discussion Papers - 2010
We examine whether stock market-listed firms in the U.S. invest suboptimally due to agency costs resulting from separation of ownership and control. We derive testable predictions to distinguish between underinvestment due to rational “short-termism” and overinvestment due to “empire...
Persistent link: https://www.econbiz.de/10008468621
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Stock Market Speculation and Managerial Myopia
Nyman, Ingmar - Department of Economics, Hunter College - 2004
This paper extends the analysis of managerial share price concerns by allowing informed trading in the stock market. It is shown that because they decrease the manager's information advantage vis-à-vis the stock market, individual investors who trade on private information improve the...
Persistent link: https://www.econbiz.de/10004987358
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Corporate Investment and Financing Constraints: Connections with Cash Management
Bruinshoofd, W.A. - de Nederlandsche Bank - 2003
The empirical application of the financing constraints paradigm supports the joint hypothesis that con-strained firms can be identified and display a stronger sensitivity of investment to cash flow. This paradigm is increasingly criticized, because some proxy variables used to identify...
Persistent link: https://www.econbiz.de/10005101876
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A Dynamic Analysis of Growth via Acquisition
Margsiri, Worawat; Melloy, Antonio S.; Ruckesz, Martin E. - Center for Economic Institutions, Institute of Economic … - 2008
Firms have a choice: grow through internal investment, or grow through acquisition. While internal growth takes time, an acquisition provides cash flows immediately, as the acquirer benefits from the investments of previous owners. The opportunity to grow internally affects the price of an...
Persistent link: https://www.econbiz.de/10005045149
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Learning from peers' stock prices and corporate investment
Foucault, Thierry; Fresard, Laurent - In: Journal of Financial Economics 111 (2014) 3, pp. 554-577
Peers' valuation matters for firms' investment: a one standard deviation increase in peers' valuation is associated with a 5.9% increase in corporate investment. This association is stronger when a firm's stock price informativeness is lower or when its managers appear less informed. Also, the...
Persistent link: https://www.econbiz.de/10010743553
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Externalities of public firm presence: Evidence from private firms' investment decisions
Badertscher, Brad; Shroff, Nemit; White, Hal D. - In: Journal of Financial Economics 109 (2013) 3, pp. 682-706
Public firms provide a large amount of information through their disclosures. In addition, information intermediaries publicly analyze, discuss, and disseminate these disclosures. Thus, greater public firm presence in an industry should reduce uncertainty in that industry. Following the...
Persistent link: https://www.econbiz.de/10010681717
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Asset liquidity, corporate investment, and endogenous financing costs
Flor, Christian Riis; Hirth, Stefan - In: Journal of Banking & Finance 37 (2013) 2, pp. 474-489
We analyze how the liquidity of real and financial assets affects corporate investment. The trade-off between liquidation costs and underinvestment costs implies that low-liquidity firms exhibit negative investment sensitivities to liquid funds, whereas high-liquidity firms have positive...
Persistent link: https://www.econbiz.de/10010595284
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Financing constraints, cash-flow risk, and corporate investment
Hirth, Stefan; Viswanatha, Marc - In: Journal of Corporate Finance 17 (2011) 5, pp. 1496-1509
Using an analytically tractable two-period model of a financially constrained firm, we derive an investment threshold that is U-shaped in cash holdings. We show analytically the relevant trade-offs leading to the U-shape: the firm balances financing costs for present and future investment,...
Persistent link: https://www.econbiz.de/10010574236