Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7352091 | Finance Research Letters | 2018 | 17 Pages |
Abstract
This paper uses data from 37 emerging markets and shows that investment of firms headquartered in countries with higher inflation is significantly less sensitive to their stock prices than that of firms headquartered in countries with lower inflation. We argue that stock prices are less informative in countries with high inflation. As a result, managers are less likely to use stock prices in their investment decisions, thereby lowering sensitivity of investment to stock prices in countries with higher inflation.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Omar Farooq, Neveen Ahmed,