The interaction between stock prices and corporate investment: is Europe different?

摘要: I find limited evidence of firm learning from stock prices in Europe and uncover multifaceted complementarities between informational operating environments determining investment sensitivity to prices. Specifically, European firms seemingly do not shift away their own (peer) even instances which peers’ (own) become relatively more informative about firms’ fundamentals. This is consistent with managers adopting conservative strategies relative U.S.-based peers, being less revealing than the U.S. Furthermore, while a may attach equal weight both its peer price innovations when are smaller, responds positively shocks that firm’s peers larger. Interestingly, decreases market share, performance, capital intensity. The decrease accentuated have industry leaders or intensive, thereby signaling perceived reduced growth opportunities. Broadly, these results imply specifics interaction behavior necessarily generalize Europe. More important, different patterns partly attributable differences amount internal information, turn depends on country-level institutional infrastructures.