The Business Cycle, Investor Sentiment, and Costly External Finance

• 成果类型: Article
• 署名作者: Mclean, R. David; Zhao, Mengxin
• 署名单位: University of Alberta; Massachusetts Institute of Technology (MIT)
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12047
• 发表日期: 2014
• 页码: 1377-1409
• 关键词: cash flow sensitivities; corporate-investment; consumer confidence; share issuance; stock-market; cross-section; liquidity; issues; prices; performance

摘要

The recent financial crisis shows that financial markets can impact the real economy. We investigate whether access to finance typically time-varies and, if so, what are the real effects. Consistent with time-varying external finance costs, both investment and employment are less sensitive to Tobin's q and more sensitive to cash flow during recessions and low investor sentiment periods. Share issuance plays a bigger role than debt issuance in causing these effects. Alternative tests that do not rely on q and cash flow sensitivities suggest that recessions and low sentiment increase external finance costs, thereby limiting investment and employment.