Stock Price Informativeness, Cross-Listings and Investment Decisions PDF Download
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Author: Thierry Foucault
Publisher:
ISBN:
Category :
Languages : en
Pages : 40
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Book Description
We show that a cross-listing allows a firm to make better investment decisions because it enhances stock price informativeness. This theory of cross-listings yield several predictions. In particular, it implies that the sensitivity of investment to stock prices should be larger for cross-listed firms. Moreover, the increase in value generated by a cross-listing (the cross-listing premium) should be positively related to the size of growth opportunities and negatively related to the quality of managerial information. We also analyze in details the effects of the geography of ownership (the distribution of holdings between foreign and domestic investors) on the cross-listing premium. In particular, we show that the sensitivity of the cross-listing premium to the size of growth opportunities increases when holdings (resp. market shares) become more evenly distributed between foreign and domestic investors (resp. markets). Last, we show that concentration of trading in the home market (flow-back) can indeed increase the cross-listing premium for some firms.
Author: Thierry Foucault
Publisher:
ISBN:
Category :
Languages : en
Pages : 40
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Book Description
We show that a cross-listing allows a firm to make better investment decisions because it enhances stock price informativeness. This theory of cross-listings yield several predictions. In particular, it implies that the sensitivity of investment to stock prices should be larger for cross-listed firms. Moreover, the increase in value generated by a cross-listing (the cross-listing premium) should be positively related to the size of growth opportunities and negatively related to the quality of managerial information. We also analyze in details the effects of the geography of ownership (the distribution of holdings between foreign and domestic investors) on the cross-listing premium. In particular, we show that the sensitivity of the cross-listing premium to the size of growth opportunities increases when holdings (resp. market shares) become more evenly distributed between foreign and domestic investors (resp. markets). Last, we show that concentration of trading in the home market (flow-back) can indeed increase the cross-listing premium for some firms.
Author: Qi Chen
Publisher:
ISBN:
Category :
Languages : en
Pages : 46
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Book Description
Stock prices and real investments are highly correlated. Previous literature has offered two main explanations for this high correlation. The first explanation relies on price being informative about investment opportunities, the second one is based on financing constraints. In this paper we empirically examine the effect of price informativeness on the sensitivity of investment to stock price. Using price non-synchronicity and PIN as measures of price informativeness, we find that the degree of informativeness is positively correlated with the sensitivity of investment to stock price. Since, according to previous literature, these measures reflect private information, the result suggests that prices perform an active role, i.e., that managers learn from stock price when making investment decisions. This result is robust to the inclusion of various control variables (such as controls for managerial information) and to changes in specification.
Author: Iván Blanco
Publisher: Ed. Universidad de Cantabria
ISBN: 8481028770
Category : Business & Economics
Languages : en
Pages : 90
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Book Description
Do financial derivatives enhance or impede innovation? We aim to answer this question by examining the relationship between equity options markets and standard measures of firm innovation. Our baseline results show that firms with more options trading activity generate more patents and patent citations per dollar of R&D invested. We then investigate how more active options markets affect firms' innovation strategy. Our results suggest that firms with greater trading activity pursue a more creative, diverse and risky innovation strategy. We discuss potential underlying mechanisms and show that options appear to mitigate managerial career concerns that would induce managers to take actions that boost short-term performance measures. Finally, using several econometric specifications that try to account for the potential endogeneity of options trading, we argue that the positive effect of options trading on firm innovation is causal.
Author: Qi Chen
Publisher:
ISBN:
Category :
Languages : en
Pages : 44
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Book Description
Author: Thierry Foucault
Publisher:
ISBN:
Category :
Languages : en
Pages : 56
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Book Description
Author: Ke-Hsin Chou
Publisher:
ISBN:
Category :
Languages : en
Pages : 146
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Book Description
In the change rapidly trading market, informativeness has always been attention by investors and academics. As more and more investors engage the market and form more regularly highlight corporate governance, it takes the stock information, and investor sentiment invoked by news becomes more valuable to research. The first part, This research follows Roll (1988) to investigate whether existing stock price informativeness affects the debt rate and forms a supervision effect in the Taiwan stock market. According to Morck et al. (2000) study, Taiwan market rank prior three number in price synchronize; hence we use the sample of Taiwan market as context to test price information with debt rate for checking transparent price change and market efficiency. As a result, the result shows that more transparency and openness have positive significance in the market. In the second part, we directly use artificial intelligence to capture news from public internet websites for natural language processing and use Bitcoin as an underlying to prove the iii hypothesis of sequential information arrival and the hypothesis of mixed distribution. In short, the innovative contribution of this research is to use Text mining and Big data methods to obtain news article data, introduce Artificial intelligence model calculations and quantify news sentiment data to replace transaction volume. Therefore, this research can use actual news indicator data to discuss the relationship between it and the volatility of returns to compare the estimated feasibility of the two financial hypotheses (SIAH and MDH) in Bitcoin. This approach can make up for the lack of indicator data of the information field in the past research literature and provide investors, policymakers, and academia with greater enlightenment and the role of future research.
Author: Thierry Foucault
Publisher:
ISBN:
Category : Business enterprises
Languages : en
Pages : 64
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Author: Craig Holden
Publisher: Now Publishers
ISBN: 9781601988744
Category : Business & Economics
Languages : en
Pages : 90
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Book Description
We provide a synthesis of the empirical evidence on market liquidity. The liquidity measurement literature has established standard measures of liquidity that apply to broad categories of market microstructure data. Specialized measures of liquidity have been developed to deal with data limitations in specific markets, to provide proxies from daily data, and to assess institutional trading programs. The general liquidity literature has established local cross-sectional patterns, global cross-sectional patterns, and time-series patterns.
Author: Ning Gao
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 0
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Author: Ning Gao
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 252
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Book Description
