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SUMMARY:Ripple effects of noise on corporate investment
DTSTART:20160421T120000
DTEND:20160421T130000
DTSTAMP:20260916T043944Z
UID:7163053dc056e266c37a22af015f17a7261f13da82486156de477d22
CATEGORIES:Conferences - Seminars
DESCRIPTION:Laurent FRESARD (University of Maryland)\nFirms reduce investm
 ent in response to non-fundamental drops in the stock price of their produ
 ct-market peers. This ripple effect is consistent with the idea that stock
  prices act as ``faulty informant''\, i.e.\, managers rely on stock prices
  as a source of information but cannot perfectly filter out noise in these
  prices. This ripple effect is stronger when peers' stock prices are more 
 informative\, and is weaker when managers are better informed\, as expecte
 d if stock prices provide faulty signals. Overall\, non-fundamental variat
 ions in the stock price of some firms influence the investment decisions o
 f other firms. This externality has implications for the allocation of res
 ources in the economy\, the transmission of financial shocks across firms\
 , and the volatility of aggregate investment.
LOCATION:UNIL\, Extranef\, room 118 https://planete.unil.ch/plan/?local=EX
 T-118.1
STATUS:CONFIRMED
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