Fundamentals, Misvaluation, and Investment: The Real Story

Research, Preprint OPEN
Chirinko, Robert S.; Schaller, Huntley;
(2007)
  • Publisher: Munich: Center for Economic Studies and Ifo Institute (CESifo)
  • Subject: fundamentals | USA | E44 | E22 | Wertpapieranalyse | E32 | Börsenkurs | investment | stock market | real effects of financial markets | G3 | investment, stock market, fundamentals, misvaluation, bubbles, real effects of financial markets | Kapitalanlage | misvaluation, bubbles | Schätzung | Schock
    • jel: jel:E32 | jel:G30 | jel:E44 | jel:E22 | jel:G3
      ddc: ddc:330

Is real investment fully determined by fundamentals or is it sometimes affected by stock market misvaluation? We introduce three new tests that: measure the reaction of investment to sales shocks for firms that may be overvalued; use Fama-MacBeth regressions to determin... View more
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