Artikel
Corporate investment and stock market valuation
We study the driving forces behind the positive association observed between corporate investment and stock market valuation, and how they interact with managerial equity incentives and informativeness of investment. We build a dynamic model where managers use investment choices to influence investors' opinions about firms' future prospects and increase the market valuation. The incentives to manipulate the valuation processes increase with managerial equity incentives and informativeness of investment. Our empirical findings support the model's predictions that the tendency of using investment to boost market valuation is stronger when managerial stock ownership is high or when earnings quality is low (i.e., there is strong reliance on investment for information).
- Language
-
Englisch
- Bibliographic citation
-
Journal: Journal of Business Finance & Accounting ; ISSN: 1468-5957 ; Volume: 50 ; Year: 2022 ; Issue: 3-4 ; Pages: 795-819 ; Hoboken, NJ: Wiley
- Classification
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Management
- Subject
-
compensation
equity incentives
executives
financial report quality
investment
investment informativeness
misvaluation
stock market
top management team
- Event
-
Geistige Schöpfung
- (who)
-
Liao, Shushu
Errico, Marco
- Event
-
Veröffentlichung
- (who)
-
Wiley
- (where)
-
Hoboken, NJ
- (when)
-
2022
- DOI
-
doi:10.1111/jbfa.12649
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Liao, Shushu
- Errico, Marco
- Wiley
Time of origin
- 2022
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