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- W3138967729 abstract "This paper investigates whether more informative stock prices lead to managers making more efficient corporate decisions. I find a negative relationship between probability of informed trading (PIN) and firm value shortfalls, which capture managerial inefficiency. This relationship is robust to controlling for endogeneity issues and using alternative measures. Moreover, I show that stock price informativeness reduces managerial inefficiency by revealing new information to guide managers’ decisions and by enhancing corporate governance mechanisms that incentivize managers to make value-maximization decisions. This paper adds firm-level evidence to studies on the connection between stock market (informationally) efficiency and real economy efficiency." @default.
- W3138967729 created "2021-03-29" @default.
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- W3138967729 date "2021-07-01" @default.
- W3138967729 modified "2023-09-27" @default.
- W3138967729 title "Stock price informativeness and managerial inefficiency" @default.
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- W3138967729 doi "https://doi.org/10.1016/j.iref.2021.03.006" @default.
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