Firm-Specific Information and the Efficiency of Investment

  title={Firm-Specific Information and the Efficiency of Investment},
  author={Peter Blair Henry},
In the three-year period following stock market liberalizations, the growth rate of the typical firm’s capital stock exceeds its pre-liberalization mean by an average of 4.1 percentage points. Cross-sectional changes in investment are significantly correlated with the signals about fundamentals embedded in the stock price changes that occur upon liberalization. Panel data estimations show that a 10-percentage point increase in a firm’s expected future sales growth predicts a 2.9to 3.5… CONTINUE READING


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