Capital Budgeting versus Market Timing: An Evaluation Using Demographics

• 成果类型: Article
• 署名作者: Dellavigna, Stefano; Pollet, Joshua M.
• 署名单位: University of California System; University of California Berkeley; University of Illinois System; University of Illinois Urbana-Champaign
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2012.01799.x
• 发表日期: 2013
• 页码: 237-270
• 关键词: CORPORATE-INVESTMENT; underreaction; BEHAVIOR; finance

摘要

Using demand shifts induced by demographics, we evaluate capital budgeting and market timing. Capital budgeting implies that industries anticipating positive demand shifts in the near future should issue more equity to finance greater capacity. To the extent that demand shifts in the distant future are not incorporated into equity prices, market timing implies that industries anticipating positive shifts in the distant future should issue less equity due to undervaluation. The evidence supports both theories: new listings and equity issuance respond positively to demand shifts during the next 5 years and negatively to demand shifts further in the future.