Legal Protection, Equity Dependence and Corporate Investment:Evidence from around the World

摘要：

In this paper, we investigate whether legal protection and the equity financing channel affect the relationship between corporate investment and stock prices in an international setting. We find that equity-dependent firms display larger sensitivity of corporate investment to stock prices, which is consistent with the equity-financing channel argument. In addition, firms in countries with stronger legal protection have corporate investment that is more sensitive to their stock prices. This relationship is found to be more pronounced for equity-dependent firms. Overall, our evidence complements the earlier finding by Baker et al. (2003) and does not support the notion that the stock market is just a sideshow.

关键词： Legal protection Equity dependence Corporate investment

作者: Yuanto Kusnadi K.C. John Wei

作者单位: Department of Finance Hong Kong University of Science and Technology Clear Water Bay, Kowloon, Hong Kong

会议类型: 国际会议

会议名称: 2006年中国国际金融年会

会议地点: 西安

会议语种:英文

在线出版日期: 2006-07-17（万方平台首次上网日期，不代表论文的发表时间）