Individualism and sensitivity of investment to stock prices: evidence from emerging markets

الموضوعات

اقتصاد

الملخص

Chui et al. (2010) argue that cultures with high levels of individualism are defined by overconfidence and self-attribution bias. Markus and Kitayama (1991) and Heine et al. (1999) note that these biases lead to less efficient stock prices with excess volatility. Foucault and Frésard (2012) show that sensitivity of investment to stock prices is an increasing function of informativeness of stock prices. They argue that sensitivity of investment to stock prices increase because value-maximizing managers are forced to use all available information to forecast the cash flows of their capital allocation decisions. They argue that information revealed via informative stock prices is new to value maximizing managers. Consequently, these managers incorporate this information in their analysis, thereby increasing sensitivity of investment to informative stock prices. This paper argues that individualism, being a significant determinant of information content in stock prices, can also affect sensitivity of investment to stock prices. Using data from 37 emerging markets, our results show that individualism significantly reduces sensitivity of investment to stock prices during the period between 2008 and 2014. Our results are robust to alternate estimation procedures. Our results also indicate that the effect of individualism on sensitivity of investment to stock prices is more pronounced when investment expenditures are large. Moreover, we also show that the impact of individualism on the sensitivity of investment to stock prices is moderated by the institutional, social, and cultural environment of the country.

روابط وملفات

التعريف والنوع

رقم الوثيقة

0c671863-c280-490c-8ad2-bb6726b5d67c

رقم العقد

0

نوع الوسائط

Crawler

نوع المحتوى

الرسائل العلمية

صيغة المصدر

رسائل ماجيستير

نوع الملف

pdf text

أسماء الملفات

873796_1.pdf

بيانات النشر

ألقاب المؤلفين

[{"name_ar":"Ayatallah Mohamed Amin","title_ar":"اعداد","title_en":"Preparation"},{"name_ar":"Omar Farouq","title_ar":"اشراف","title_en":"Supervision"}]

اللغة

English

المصدر والدورية

اسم المصدر

Individualism and sensitivity of investment to stock prices: evidence from emerging markets

المحتوى والصفحات

عدد الصفحات

0

إشراف وإعداد

الإشراف

Omar Farouq

الإعداد

Ayatallah Mohamed Amin

الاقتباسات الببليوغرافية