Title :
Stock Price Informativeness and Investment-Cash Flow Sensitivity
Author_Institution :
Bus. Sch., Central South Univ., Changsha, China
Abstract :
Durnev, Morck and Yeung(2004a) show that more informative stock prices facilitate more efficient corporate investment. I first show how stock prices informativeness affect firm´s investment-cash flow sensitivity. Using China´s listed companies from manufacturing industry between 2001 and 2008, I find strong negative relations between stock prices informativeness and investment-cash flow sensitivity, the investment-cash flow sensitivity decreases significantly with increasing stock price informativeness. The empirical results also strongly support the point that more informative stock price facilitate more efficient capital allocation.
Keywords :
investment; stock markets; capital allocation; investment-cash flow sensitivity; stock price informativeness; Books; Companies; Economics; Industries; Investments; Resource management; Sensitivity; asymmetric information; efficiency of capital allocation; investment-cash flow sensitivity; stock price informativeness;
Conference_Titel :
Information Science and Management Engineering (ISME), 2010 International Conference of
Conference_Location :
Xi´an
Print_ISBN :
978-1-4244-7669-5
Electronic_ISBN :
978-1-4244-7670-1
DOI :
10.1109/ISME.2010.148
