Investor Sentiment and Corporate Finance: Micro and Macro

Owen A. Lamont and Jeremy Stein ()

No 11882, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We document that net equity issuance is considerably more sensitive to aggregate stock returns and Q's than to firm-level stock returns and Q's. Very similar patterns also emerge when we look at merger activity. In light of earlier work (Campbell 1991, Vuolteenaho 2002) which finds that aggregate stock returns are less informative about future cashflows than are firm-level stock returns--and thus, potentially more strongly influenced by investor sentiment--these results suggest that both equity issuance and mergers are to a significant extent driven by market-timing considerations, as opposed to by purely fundamental factors.

JEL-codes: G14 G32 G34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-fin and nep-fmk
Date: 2005-12
Note: CF
View list of references

Downloads: (external link)
http://www.nber.org/papers/w11882.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:nbr:nberwo:11882

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w11882
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().