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Equity Financing Dependence and Investment Behavior under the Large Shareholder Control:Empirical Evidence Based on Behavioral Corporation Finance |
HAO Ying LIU Xing |
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Abstract Based on behavioral corporation finance, this paper firstly illuminates the impact of mispricing on corporation investment behavior through equity finance channel. Subsequently the degree of equity finance dependence is measured, and the corporation investment behavior is empirically studied under the analysis of large shareholders' benefit. Conclusions are as follows: in the corporations which acquired equity financing, the stock price is positively related to the corporation investment level. The greater the dependence of equity financing is, the more the investment level is sensitive to stock price. The interaction between large shareholder control and stock mispricing has a greater push to corporation investment than the single stock price does. These conclusions suggest that though the stock mispricing independently influences the corporation investment, the degree of impact differs because the model and efficiency of corporation governance are different..
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Received: 26 December 2008
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Corresponding Authors:
HAO Ying
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