We investigate how firms’ cross learning amplifies industry-wide investment waves. Firms’ technologies are subject to idiosyncratic shocks and a common shock, and their asset prices aggregate speculators’ private information about the two types of shocks. In investing, each firm learns from other firms’ prices (in addition to its own) to make better inference about the common shock, leading to ...

Green investing, or socially responsible investing (SRI), which refers to making investment decisions according to both financial and ethical criteria, has become increasingly popular in recent years. This paper explores the effects of ethical screening on the investment decisions of firms that fail the screen (’polluting’ firms) and on their decisions to reform so as to pass the screen. The pa...

We assess the impact of the Sarbanes-Oxley Act of 2002 on corporate investment in an investment Euler equation framework, where a dummy for the passage of the Act is allowed to affect the rate at which managers discount future investment payoffs. Using generalized method of moments estimators, we find that the rate U.S. firm managers apply to discount investment projects rises significantly aft...

I explore the implications for asset prices and macroeconomic dynamics of shocks that improve real investment opportunities and thus affect the representative household’s marginal utility. These investment shocks generate differences in risk premia due to their heterogenous impact on firms: they benefit firms producing investment relative to firms producing consumption goods, and increase the v...

This paper analyses the (differential) impact of perceived expectations and uncertainty on investment spending in small and large firms. We analyse two types of investment, viz. aggregate investment and investment in energy-saving technologies, using Dutch firm level data. The results show that expectations and uncertainty about inputand output prices and domestic demand have substantial but di...

Most of the literature on real options considers the optimal decision of a firm in isolation from competitors. In reality, however, the actions of competing firms often affect each other’s investment opportunities. We develop a game model where many firms compete for a single investment opportunity. When one of the firms triggers the investment the opportunity is completely lost for the other f...

this paper talks about the measurement of efficiency and productivity of non-life insurance firms in india. this study is focused on twelve private non-life insurance firms and four public sector non-life insurance firms of india in the period 2008-09 to 2012-13. data envelopment analysis (dea) coupled with malmquist productivity index is used in measuring the efficiency as well as productivity...

We assess the impact of institutions on Chinese firms’ corporate investment in an investment Euler equation framework. We allow the variables measuring institutions to affect the rate at which firm managers discount future investment payoffs. Applying generalized method of moments estimators to large samples of Chinese firms, we estimate the stochastic discount rates derived from actual investm...

【Keyword】China, investment promotion agency, firm-level data, sample selection 【Abstract】This paper tries to verify how the establishment of investment promotion agencies (IPAs) affects the decisions of foreign firms regarding their subsequent investment by combining firm-level data from the World Bank’s Enterprise Survey with city-level information on (IPAs) in China. After correcting for pote...

Firms can differentiate their products through improving their accessibilities so that it costs less for the consumers to collect information on firms’ products. In this way, firms’ products become more attractive to the consumers and thus more demand will be generated. However, this improvement requires a fair amount of investment from firms. This essay will use the spatial model, where two id...