Author: Véronique Bessière
Publisher:
ISBN:
Category :
Languages : en
Pages : 18
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Book Description
This article examines the link between uncertainty and investors' reaction to goodwill write-offs (GWWOs) for a sample of French firms during the period 2001- 2004. Our theoretical setting is derived from Daniel, Hirshleifer and Subrahmanyam (1998, hereafter DHS98) who posit that overconfidence leads to an overreaction to private information, followed by too little adjustments when the information becomes public and then a long adjustment which reduce slowly the mispricing in the long run. We consider three proxies for uncertainty - stock return volatility, analyst coverage and dispersion in analyst forecasts - and sort two samples of GWWOs according to the level of uncertainty. Our results confirm DHS98 model and, indirectly, that overconfidence is boosted by uncertainty. We identify a particular corporate event - here a bad signal: goodwill write-offs - and a particular context - high uncertainty - that fit DHS98 model, allowing private information prospecting, overconfidence in this information and arbitrage obstacles. Our tests confirm the overconfidence effect on investors' reaction: the high-uncertainty sample is characterized by strongly negative abnormal returns during the period preceding GWWOs announcement, associated with high volatility. At the announcement date, negative abnormal returns are observed in line with the self-attribution bias effect (the overreaction is strengthened by a confirming signal). The overreaction to private information is corrected in the long run, where we observe positive abnormal returns, creating a reversal. No abnormal returns are observed for the low-uncertainty sample. This study offers interesting insights in two ways: (i) in the area of financial markets and efficiency, it provides a test of a major over- and under-reaction model, (ii) in the area of corporate finance and accounting, it helps to explain investors' reaction to corporate financial disclosure according to a theoretical approach of information process and inference.
Author: Bixia Xu
Publisher:
ISBN:
Category :
Languages : en
Pages : 45
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Book Description
Capricious market behavior is theoretically documented in the literature as a competing description of investors' behavior in terms of response to new information. Empirical evidence on the existence of this behavioral bias is rather limited. Moreover, causes of this behavior and its effect on market variables are largely unexplored. In the setting of the biotech industry which is characterized by high share price volatility, I find information uncertainty causes capricious market expectation revisions, which results in high share price volatility. Biotech firms in fact face a dilemma. While no or less information disclosure can lead to high information asymmetry, more disclosure of uncertain information may fail biotech firms to benefit from information disclosure as share price volatility is found empirically positively correlated with information asymmetry measures. Moreover, I find information uncertainty is a function of a drug's development advancement, the nature of Ramp;D progress and the quot;hardnessquot; of the news.
Author: Robert K. Dixit
Publisher: Princeton University Press
ISBN: 1400830176
Category : Business & Economics
Languages : en
Pages : 484
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Book Description
How should firms decide whether and when to invest in new capital equipment, additions to their workforce, or the development of new products? Why have traditional economic models of investment failed to explain the behavior of investment spending in the United States and other countries? In this book, Avinash Dixit and Robert Pindyck provide the first detailed exposition of a new theoretical approach to the capital investment decisions of firms, stressing the irreversibility of most investment decisions, and the ongoing uncertainty of the economic environment in which these decisions are made. In so doing, they answer important questions about investment decisions and the behavior of investment spending. This new approach to investment recognizes the option value of waiting for better (but never complete) information. It exploits an analogy with the theory of options in financial markets, which permits a much richer dynamic framework than was possible with the traditional theory of investment. The authors present the new theory in a clear and systematic way, and consolidate, synthesize, and extend the various strands of research that have come out of the theory. Their book shows the importance of the theory for understanding investment behavior of firms; develops the implications of this theory for industry dynamics and for government policy concerning investment; and shows how the theory can be applied to specific industries and to a wide variety of business problems.
Author: Robert S. Pindyck
Publisher: World Bank Publications
ISBN:
Category : Capital investments
Languages : en
Pages : 58
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Book Description
Irreversible investment is especially sensitive to such risk factors as volatile exchange rates and uncertainty about tariff structures and future cash flows. If the goal of macroeconomic policy is to stimulate investment, stability and credibility may be more important than tax incentives or interest rates.
Author: Hersh Shefrin
Publisher: College Ie Overruns
ISBN: 9781259254864
Category : Corporations
Languages : en
Pages : 300
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Book Description
Author: Peter Kennedy
Publisher: John Wiley & Sons
ISBN: 1405182571
Category : Business & Economics
Languages : en
Pages : 608
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Book Description
Dieses etwas andere Lehrbuch bietet keine vorgefertigten Rezepte und Problemlösungen, sondern eine kritische Diskussion ökonometrischer Modelle und Methoden: voller überraschender Fragen, skeptisch, humorvoll und anwendungsorientiert. Sein Erfolg gibt ihm Recht.
Author: Nguyen Danh Nguyen
Publisher: Springer Nature
ISBN: 9464633484
Category :
Languages : en
Pages : 594
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Book Description
Zusammenfassung: This is an open access book. Hanoi University of Science and Technology - School of Economics and Management, University of Economics Ho Chi Minh City, University of Economics and Business - Vietnam National University, Hanoi, National Economics University - Faculty of Business and Management, The University of Danang - University of Economics, Vietnam National University - International School, Foreign Trade University, University of Hertfordshire (UK), AVSE Global (France) and PPM School of Management (Indonesia) will organize The 11th International Conference on Emerging Challenges: Smart Business and Digital Economy, Vietnam on November 3-4, 2023. We would like to invite you to be a part of the ICECH2023 and submit your research papers for presentation consideration. The aim of ICECH2023 is to provide a forum for academics and professionals to share research findings, experiences and knowledge for adaptation and business strategy in a post-Covid as well as various uncertainties and complexities in the world in the Asia-Pacific region. We welcome the submissions in Economics, Business, Innovation Management, and Business Law
Author: Laura L. Veldkamp
Publisher: Princeton University Press
ISBN: 140084049X
Category : Business & Economics
Languages : en
Pages : 181
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Book Description
An authoritative graduate textbook on information choice, an exciting frontier of research in economics and finance Most theories in economics and finance predict what people will do, given what they know about the world around them. But what do people know about their environments? The study of information choice seeks to answer this question, explaining why economic players know what they know—and how the information they have affects collective outcomes. Instead of assuming what people do or don't know, information choice asks what people would choose to know. Then it predicts what, given that information, they would choose to do. In this textbook, Laura Veldkamp introduces graduate students in economics and finance to this important new research. The book illustrates how information choice is used to answer questions in monetary economics, portfolio choice theory, business cycle theory, international finance, asset pricing, and other areas. It shows how to build and test applied theory models with information frictions. And it covers recent work on topics such as rational inattention, information markets, and strategic games with heterogeneous information. Illustrates how information choice is used to answer questions in monetary economics, portfolio choice theory, business cycle theory, international finance, asset pricing, and other areas Teaches how to build and test applied theory models with information frictions Covers recent research on topics such as rational inattention, information markets, and strategic games with heterogeneous information
Author: Kim Hua Tan
Publisher:
ISBN: 9781902546131
Category : Business planning
Languages : en
Pages : 106
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Book Description
Author: G. Constantinides
Publisher: Elsevier
ISBN: 9780444513632
Category : Business & Economics
Languages : en
Pages : 698
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Book Description
Arbitrage, State Prices and Portfolio Theory / Philip h. Dybvig and Stephen a. Ross / - Intertemporal Asset Pricing Theory / Darrell Duffle / - Tests of Multifactor Pricing Models, Volatility Bounds and Portfolio Performance / Wayne E. Ferson / - Consumption-Based Asset Pricing / John y Campbell / - The Equity Premium in Retrospect / Rainish Mehra and Edward c. Prescott / - Anomalies and Market Efficiency / William Schwert / - Are Financial Assets Priced Locally or Globally? / G. Andrew Karolyi and Rene M. Stuli / - Microstructure and Asset Pricing / David Easley and Maureen O'hara / - A Survey of Behavioral Finance / Nicholas Barberis and Richard Thaler / - Derivatives / Robert E. Whaley / - Fixed-Income Pricing / Qiang Dai and Kenneth J. Singleton.
