When does the market matter? Stock prices and the investment of equity-dependent firms

• 成果类型: Article
• 署名作者: Baker, M; Stein, JC; Wurgler, J
• 署名单位: Harvard University; National Bureau of Economic Research; Harvard University; New York University
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1162/00335530360698478
• 发表日期: 2003
• 页码: 969-1005
• 关键词: ISSUES; share

摘要

We use a simple model to outline the conditions under which corporate investment is sensitive to nonfundamental movements in stock prices. The key prediction is that stock prices have a stronger impact on the investment of equity-dependent firms-firms that need external equity to finance marginal investments. Using an index of equity dependence based on the work of Kaplan and Zingales, we find support for this hypothesis. In particular, firms that rank in the top quintile of the KZ index have investment that is almost three times as sensitive to stock prices as firms in the bottom quintile.