This paper examines the impact of globalization on the cost of equity capital. We argue that the cost of equity capital decreases because of globalization for two important reasons. First, the expected return that investors require to invest in equity to compensate them for the risk they bear...

Management, directly or indirectly, learns from its firm's stock price, so that a more informative stock price should make the firm more productive. We show that stock price informativeness increases firm productivity. We predict and confirm that the productivity of smaller and younger firms,...