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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/31349
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| Title: | Comparing the Investment Behavior of Public and Private Firms |
| Authors: | Asker, John
Farre-Mensa, Joan
Ljungqvist, Alexander |
| Issue Date: | 12-Dec-2011 |
| Series/Report no.: | FIN-11-016 |
| Abstract: | We evaluate differences in investment behavior between stock market
listed and privately held firms in the U.S. using a rich new data source
on private firms. Listed firms invest less and are less responsive to
changes in investment opportunities compared to observably similar,
matched private firms, especially in industries in which stock prices
are particularly sensitive to current earnings. These differences do not
appear to be due to unobserved differences between public and private
firms, how we measure investment opportunities, life cycle differences,
or our matching criteria. We suggest that the patterns we document are
most consistent with theoretical models emphasizing the role of
managerial myopia. |
| URI: | http://hdl.handle.net/2451/31349 |
| Appears in Collections: | Finance Working Papers
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