Stock Market Misvaluation and Corporate Investment
This paper explores whether and why misvaluation affects corporate investment by com- paring tangible and intangible investments. We identify a stocks misvaluation by fil- tering growth prospects from market price. Capital, and especially R&D expenditures increase with overpricing, even after controlling for equity issuance; but only among overvalued firms. The sensitivity of capital expenditures to misvaluation is somewhat stronger among financially constrained firms; this differential is strong and in the oppo- site direction for R&D. The effect of misvaluation on R&D is stronger for small firms, suggesting that this effect does not operate primarily through equity issuance. Over- all, our evidence supports several implications of the misvaluation hypothesis for the tangible and intangible components of investment.
Ming Dong David Hirshleifer Siew Hong Teoh
Schulich School of Business, York University, 4700 Keele Street, Toronto, Ontario M3J 1P3, Canada Merage School of Business, University of California, Irvine
国际会议
成都
英文
1-48
2007-07-09（万方平台首次上网日期，不代表论文的发表时间）