Corporate Investment Behavior With Incomplete Information
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Asymmetric Information, Corporate Finance, and Investment
Author | : R. Glenn Hubbard |
Publisher | : University of Chicago Press |
Total Pages | : 354 |
Release | : 2009-05-15 |
Genre | : Business & Economics |
ISBN | : 0226355942 |
In this volume, specialists from traditionally separate areas in economics and finance investigate issues at the conjunction of their fields. They argue that financial decisions of the firm can affect real economic activity—and this is true for enough firms and consumers to have significant aggregate economic effects. They demonstrate that important differences—asymmetries—in access to information between "borrowers" and "lenders" ("insiders" and "outsiders") in financial transactions affect investment decisions of firms and the organization of financial markets. The original research emphasizes the role of information problems in explaining empirically important links between internal finance and investment, as well as their role in accounting for observed variations in mechanisms for corporate control.
United States System of Allocating Investment Capital
Author | : United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs |
Publisher | : |
Total Pages | : 220 |
Release | : 1992 |
Genre | : Capital investments |
ISBN | : |
As If the Future Mattered
Author | : Neva R. Goodwin |
Publisher | : University of Michigan Press |
Total Pages | : 344 |
Release | : 1996 |
Genre | : Business & Economics |
ISBN | : 9780472106400 |
Explores how society can learn to care about the future
Corporate Investment Behavior in the Imperfect Capital Market
Author | : Sijing Zong |
Publisher | : |
Total Pages | : 326 |
Release | : 2006 |
Genre | : Capital market |
ISBN | : |
My dissertation is a study of corporate investment behavior under market imperfections. This dissertation is structured as three inter-related essays that each addresses a particular aspect of the investment behavior of firms and all share common themes which are 1) market imperfections complicate managerial decisions on investments; and 2) the models based on perfect market assumptions may not be correct. The first essay, The relationship between internal cash flow and investments, studies the puzzle of the sensitivity of corporate investments to internal cash flows and finds that a U-shaped sensitivity curve between investment and cash flows can be clearly identified in the U.S. and in most other countries studied. The second essay, The relationship between market valuation and corporate investments, studies the relationship between stock market valuation and firm investments using a model controlling for many market imperfection components and employing simultaneous equations estimates. Essay two finds that both market perceptions and fundamental factors are important influences on corporate investment decisions. Moreover, we document that market valuation has a much higher impact on investment than fundamental variables, which seems to be consistent with the contentions in Barro (1990) and Baker et al. (2003). The third essay, Who will benefit from diversification: a transaction cost view of diversified firms, studies the issue of diversification and using data for a number of countries finds that both firm-level and country-level variables are important determinants of the excess values of diversified firms. We find that country risk, legal system, country disclosure level, information asymmetry measures, and agency cost measures are all important factors that influence diversified firm values. Our findings are largely consistent with those suggested by the transaction cost theory and provide a new perspective for the evaluations of firm diversification. In summary, this dissertation studies the impacts of market imperfections on corporate investment decisions and suggests that when operating in an imperfect market, a firm's investment decision-making process is influenced by cash flows, stock prices, and transactions costs, and is much more complicated than in perfect markets.
Proceedings of the Fourteenth International Conference on Management Science and Engineering Management
Author | : Jiuping Xu |
Publisher | : Springer Nature |
Total Pages | : 856 |
Release | : 2020-06-22 |
Genre | : Technology & Engineering |
ISBN | : 3030498298 |
This book gathers the proceedings of the 14th International Conference on Management Science and Engineering Management (ICMSEM 2020). Held at the Academy of Studies of Moldova from July 30 to August 2, 2020, the conference provided a platform for researchers and practitioners in the field to share their ideas and experiences. Covering a wide range of topics, including hot management issues in engineering science, the book presents novel ideas and the latest research advances in the area of management science and engineering management. It includes both theoretical and practical studies of management science applied in computing methodology, highlighting advanced management concepts, and computing technologies for decision-making problems involving large, uncertain and unstructured data. The book also describes the changes and challenges relating to decision-making procedures at the dawn of the big data era, and discusses new technologies for analysis, capture, search, sharing, storage, transfer and visualization, and in the context of privacy violations, as well as advances in the integration of optimization, statistics and data mining. Given its scope, it will appeal to a wide readership, particularly those looking for new ideas and research directions.
Handbook of the Economics of Finance
Author | : G. Constantinides |
Publisher | : Elsevier |
Total Pages | : 698 |
Release | : 2003-11-04 |
Genre | : Business & Economics |
ISBN | : 9780444513632 |
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.
On Corporate International Investment Under Incomplete Information
Author | : Mondher Bellalah |
Publisher | : |
Total Pages | : 10 |
Release | : 2004 |
Genre | : |
ISBN | : |
This paper presents a simple model in which real exchange risk, the competition between firms in different markets and diversification gains affect corporate international investment. By accounting for the role of information, the model embodies different existing explanations based on economic and behavioral variables. We show that real exchange risk, diversification motives and information costs are important elements in the determination of corporate international investment decisions. Using optimal control methods, we provide the general solution for the proportion of firm's total capital budget. We apply the method in Bellalah and Zhen (2002) that can be used to solve other financial control problems.
Financial Development and Dynamic Investment Behavior
Author | : Inessa Love |
Publisher | : World Bank Publications |
Total Pages | : 40 |
Release | : 2002 |
Genre | : Business enterprises |
ISBN | : |
The authors apply vector autoregression to firm-level panel data from 36 countries to study the dynamic relationship between firms' financial conditions and investment. They argue that by using orthogonalized impulse-response functions they are able to separate the "fundamental factors" (such as marginal profitability of investment) from the "financial factors" (such as availability of internal finance) that influence the level of investment. The authors find that the impact of the financial factors on investment, which they interpret as evidence of financing constraints, is significantly larger in countries with less developed financial systems. The finding emphasizes the role of financial development in improving capital allocation and growth.
Incomplete Information and Heterogeneous Beliefs in Continuous-time Finance
Author | : Alexandre C. Ziegler |
Publisher | : Springer Science & Business Media |
Total Pages | : 205 |
Release | : 2012-11-02 |
Genre | : Business & Economics |
ISBN | : 3540247556 |
After a brief review of the existing incomplete information literature, the effect of incomplete information on investors' exptected utility, risky asset prices, and interest rates is described. It is demonstrated that increasing the quality of investors' information need not increase their expected utility and the prices of risky assets. The impact of other factors is discussed in detail. It is also demonstrated that financial markets in general do not aggregate information efficiently, a fact that can explain the equity premium puzzle.