Do improvements in the information environment affect real investment decisions?
Autor(a) principal: | |
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Data de Publicação: | 2013 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/1822/27231 |
Resumo: | We examine how changes in the information environment can affect real investment decisions. Using the events surrounding mandatory adoption of IFRS as exogenous shocks in information asymmetry, we find a significant increase in firms’ investment-to-price sensitivity following IFRS adoption that persists for years after the adoption. These results are in line with the learning hypothesis and suggest that the improvements in the information environment lead to stock prices that are more informative, which enhances managers’ reliance on stock prices in making investment and other decisions. We document that this increase in investment-to-stock price sensitivity is stronger for firms in countries with weaker exante institutional and accounting quality as well as for firms that experience a larger improvement in stock price informativeness. Finally, we also show that higher investment-to-stock-price sensitivity is associated with improvements in performance. |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Do improvements in the information environment affect real investment decisions?We examine how changes in the information environment can affect real investment decisions. Using the events surrounding mandatory adoption of IFRS as exogenous shocks in information asymmetry, we find a significant increase in firms’ investment-to-price sensitivity following IFRS adoption that persists for years after the adoption. These results are in line with the learning hypothesis and suggest that the improvements in the information environment lead to stock prices that are more informative, which enhances managers’ reliance on stock prices in making investment and other decisions. We document that this increase in investment-to-stock price sensitivity is stronger for firms in countries with weaker exante institutional and accounting quality as well as for firms that experience a larger improvement in stock price informativeness. Finally, we also show that higher investment-to-stock-price sensitivity is associated with improvements in performance.COMPETE, QREN, FEDER, Fundação para a Ciência e a Tecnologia (FCT)Universidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)Universidade do MinhoLoureiro, GilbertoTaboada, Alvaro G.20132013-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/1822/27231enghttp://www.nipe.eeg.uminho.pt/Uploads/NIPE_WP_20_2013.pdfinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-07-21T12:47:32Zoai:repositorium.sdum.uminho.pt:1822/27231Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T19:45:36.488004Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Do improvements in the information environment affect real investment decisions? |
title |
Do improvements in the information environment affect real investment decisions? |
spellingShingle |
Do improvements in the information environment affect real investment decisions? Loureiro, Gilberto |
title_short |
Do improvements in the information environment affect real investment decisions? |
title_full |
Do improvements in the information environment affect real investment decisions? |
title_fullStr |
Do improvements in the information environment affect real investment decisions? |
title_full_unstemmed |
Do improvements in the information environment affect real investment decisions? |
title_sort |
Do improvements in the information environment affect real investment decisions? |
author |
Loureiro, Gilberto |
author_facet |
Loureiro, Gilberto Taboada, Alvaro G. |
author_role |
author |
author2 |
Taboada, Alvaro G. |
author2_role |
author |
dc.contributor.none.fl_str_mv |
Universidade do Minho |
dc.contributor.author.fl_str_mv |
Loureiro, Gilberto Taboada, Alvaro G. |
description |
We examine how changes in the information environment can affect real investment decisions. Using the events surrounding mandatory adoption of IFRS as exogenous shocks in information asymmetry, we find a significant increase in firms’ investment-to-price sensitivity following IFRS adoption that persists for years after the adoption. These results are in line with the learning hypothesis and suggest that the improvements in the information environment lead to stock prices that are more informative, which enhances managers’ reliance on stock prices in making investment and other decisions. We document that this increase in investment-to-stock price sensitivity is stronger for firms in countries with weaker exante institutional and accounting quality as well as for firms that experience a larger improvement in stock price informativeness. Finally, we also show that higher investment-to-stock-price sensitivity is associated with improvements in performance. |
publishDate |
2013 |
dc.date.none.fl_str_mv |
2013 2013-01-01T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/1822/27231 |
url |
http://hdl.handle.net/1822/27231 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
http://www.nipe.eeg.uminho.pt/Uploads/NIPE_WP_20_2013.pdf |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Universidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE) |
publisher.none.fl_str_mv |
Universidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE) |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
repository.mail.fl_str_mv |
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1799133022109302784 |