Externalities of public firm presence: Evidence from private firms' investment decisions

• 成果类型: Article
• 署名作者: Badertscher, Brad; Shroff, Nemit; White, Hal D.
• 署名单位: University of Notre Dame; Massachusetts Institute of Technology (MIT); University of Michigan System; University of Michigan
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2013.03.012
• 发表日期: 2013
• 页码: 682-706
• 关键词: Corporate investment; uncertainty; q theory; Private companies; CORPORATE DISCLOSURE; Financial accounting; Disclosure regulation

摘要

Public firms provide a large amount of information through their disclosures. In addition, information intermediaries publicly analyze, discuss, and disseminate these disclosures. Thus, greater public firm presence in an industry should reduce uncertainty in that industry. Following the theoretical prediction of investment under uncertainty, we hypothesize and find that private firms are more responsive to their investment opportunities when they operate in industries with greater public firm presence. Further, we find that the effect of public firm presence is greater in industries with better information quality and in industries characterized by a greater degree of investment irreversibility. Our results suggest that public firms generate positive externalities by reducing industry uncertainty and facilitating more efficient private firm investment. (c) 2013 Elsevier B.V. All rights reserved.