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Article: Real Effects of Stock Underpricing
Title | Real Effects of Stock Underpricing |
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Authors | |
Keywords | Market inefficiency Fire sales Mutual funds Investment Employment |
Issue Date | 2013 |
Publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jfec |
Citation | Journal of Financial Economics, 2013, v. 108 n. 2, p. 392-408 How to Cite? |
Abstract | This paper provides evidence for a causal effect of equity prices on corporate investment and employment. We use fire sales by distressed equity funds during the 2007–2009 financial crisis to identify substantial exogenous underpricing. Firms whose stocks are most underpriced have considerably lower investment and employment than industry peers not subject to any fire sale discount. The causal effect of underpricing on investment is found to be largely concentrated on the most financially constrained firms. |
Persistent Identifier | http://hdl.handle.net/10722/187617 |
ISSN | 2023 Impact Factor: 10.4 2023 SCImago Journal Rankings: 13.655 |
SSRN | |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Hau, H | - |
dc.contributor.author | Lai, SCS | - |
dc.date.accessioned | 2013-08-21T07:05:20Z | - |
dc.date.available | 2013-08-21T07:05:20Z | - |
dc.date.issued | 2013 | - |
dc.identifier.citation | Journal of Financial Economics, 2013, v. 108 n. 2, p. 392-408 | - |
dc.identifier.issn | 0304-405X | - |
dc.identifier.uri | http://hdl.handle.net/10722/187617 | - |
dc.description.abstract | This paper provides evidence for a causal effect of equity prices on corporate investment and employment. We use fire sales by distressed equity funds during the 2007–2009 financial crisis to identify substantial exogenous underpricing. Firms whose stocks are most underpriced have considerably lower investment and employment than industry peers not subject to any fire sale discount. The causal effect of underpricing on investment is found to be largely concentrated on the most financially constrained firms. | - |
dc.language | eng | - |
dc.publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jfec | - |
dc.relation.ispartof | Journal of Financial Economics | - |
dc.rights | NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Financial Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Financial Economics, vol 108, issue 2, 2013. DOI: 10.1016/j.jfineco.2012.11.001 | - |
dc.rights | © 2012. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/ | - |
dc.subject | Market inefficiency | - |
dc.subject | Fire sales | - |
dc.subject | Mutual funds | - |
dc.subject | Investment | - |
dc.subject | Employment | - |
dc.title | Real Effects of Stock Underpricing | - |
dc.type | Article | - |
dc.identifier.email | Hau, H: prof@haraldhau.com | - |
dc.identifier.email | Lai, SCS: sandy_lai@hku.hk | - |
dc.identifier.authority | Lai, SCS=rp01620 | - |
dc.description.nature | postprint | - |
dc.identifier.doi | 10.1016/j.jfineco.2012.11.001 | - |
dc.identifier.scopus | eid_2-s2.0-84876346589 | - |
dc.identifier.hkuros | 220756 | - |
dc.identifier.volume | 108 | - |
dc.identifier.issue | 2 | - |
dc.identifier.spage | 392 | - |
dc.identifier.epage | 408 | - |
dc.identifier.isi | WOS:000318383200006 | - |
dc.publisher.place | Netherlands | - |
dc.identifier.ssrn | 1965957 | - |
dc.identifier.issnl | 0304-405X | - |