Investment horizons and information

• Autores: Kershen Huang, Alex Petkevich
• Localización: Journal of Business Finance & Accounting, ISSN-e 1468-5957, Vol. 43, Nº. 7-8, 2016, págs. 1017-1056
• Idioma: inglés
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• Resumen

  • We examine the relation between institutions' investment horizons on firms' financing and investment decisions. Firms with larger short-term institutional ownership use less debt financing and invest more in corporate liquidity. In contrast, firms with larger long-term institutional ownership use more internal funds, less external equity financing, and preserve investments in long-term assets. These results are primarily driven by the variation in informational preferences of different institutions. We argue that short-term (long-term) institutions collect and use value-neutral (value-enhancing) information. [ABSTRACT FROM AUTHOR]