Do corporate managers glean information from their stock prices? New evidence from China's strategic emerging industries

发表日期：2024-09-12

期刊：Economic Modelling

作者：Zhiwei Xu; Xuan Liu; Teng Zhang; Pengyue Ren

单位：Southwestern University of Finance and Economics 555, Liutai Avenue, Wenjiang District, Chengdu, Sichuan, 611130 ,China;Central University of Finance and Economics 39, South College Road, Haidian District, Chengdu, Beijing, 100081, China

摘要：Strategic emerging industries (SEIs) have become the pillar industries in China. However, prior studies argue that the Chinese stock market fails to adequately support the development of SEIs by primarily considering its financing function while ignoring its market feedback role. Based on data from 2007 to 2020, our study fills this gap by examining whether managers of Chinese SEI firms glean information from stock prices to guide their investment decisions. We find a significantly positive relationship between stock price informativeness (proxied by the volume-synchronized probability of informed trading) and investment-to-price sensitivity in the SEI firms only, indicating that managers of the SEI firms exhibit prominent learning behaviors. We further reveal that high growth prospects and high sensitivity of corporate fundamentals to macroeconomic factors contribute to the learning behaviors in China's SEIs. Our study sheds light on the role of the Chinese stock market in supporting the SEIs' evolution.

关键词：Managerial learning behavior;Strategic emerging industries;Stock price informativeness;Investment-to-price sensitivity

链接：Do corporate managers glean information from their stock prices? New evidence from China's strategic emerging industries