Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/46433 
Kompletter Metadatensatz
Erscheint in der Sammlung:
DublinCore-FeldWertSprache
dc.contributor.authorChirinko, Robert S.en
dc.contributor.authorSchaller, Huntleyen
dc.date.accessioned2011-06-22-
dc.date.accessioned2011-06-29T11:19:01Z-
dc.date.available2011-06-29T11:19:01Z-
dc.date.issued2011-
dc.identifier.urihttp://hdl.handle.net/10419/46433-
dc.description.abstractMany economists believe that the stock market plays an important role in efficiently allocating capital to its most productive uses. This standard story of the stock market was called into question by events in the late 1990s, when some observers believed that stock market overvaluation - or a bubble - led to overinvestment. Both the standard and overinvestment stories involve discount rates and, to differentiate between the two stories, this paper examines the discount rates used by firms in making their investment decisions. We use a revealed preference approach that relies on the pattern of investment spending - combined with investment theory - to estimate the discount rates used by managers. The standard story predicts that firms with high stock prices and good investment opportunities should have discount rates that do not differ systematically from the risk-adjusted market rate. The overinvestment story predicts that firms with high stock prices and poor investment opportunities should have discount rates consistently below the market rate. Based on a panel dataset of over 50,000 firm-year observations, we find support for both stories. The behavior of high stock price firms with good measured investment opportunities is best described by the standard story, while the overinvestment story provides the most appropriate interpretation of the behavior of high stock price firms with poor investment opportunities. Firms in this latter category accumulate between 15.1% and 45.2% too much capital. These estimates suggest that, even before they burst, bubbles adversely affect economic activity by misallocating capital.en
dc.language.isoengen
dc.publisher|aCenter for Economic Studies and ifo Institute (CESifo) |cMunichen
dc.relation.ispartofseries|aCESifo Working Paper |x3491en
dc.subject.jelE44en
dc.subject.jelE22en
dc.subject.jelG30en
dc.subject.jelE32en
dc.subject.ddc330en
dc.subject.keywordbubblesen
dc.subject.keywordinvestmenten
dc.subject.keywordstock marketsen
dc.subject.keywordreal effects of financial marketsen
dc.subject.keywordcapital formationen
dc.titleDo bubbles lead to overinvestment? A revealed preference approach-
dc.typeWorking Paperen
dc.identifier.ppn662658000en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

Datei(en):
Datei
Größe
202.09 kB





Publikationen in EconStor sind urheberrechtlich geschützt.