Uncertainty, Investor Sentiment, and Innovation

Autor:	Paolo Fulghieri, David L. Dicks
Rok vydání:	2020
Předmět:	Economics and Econometrics 050208 finance Accounting 0502 economics and business 05 social sciences Economics 050207 economics Finance
Zdroj:	The Review of Financial Studies. 34:1236-1279
ISSN:	1465-7368 0893-9454
DOI:	10.1093/rfs/hhaa065
Popis:	We develop a theory of innovation waves, investor sentiment, and merger activity based on Knightian uncertainty. Uncertainty-averse investors are more optimistic on an innovation when they can make contemporaneous investments in multiple uncertain projects. Innovation waves occur when there is a critical mass of innovative companies, and are characterized by stronger investor sentiment, higher equity valuation, and hot initial public offering markets. Our approach to investor sentiment is not based on erroneous beliefs disjoint from economic fundamentals, but depends on uncertainty on the fundamentals. Our model can explain sector-specific booms uncorrelated with aggregate economic activity and the overall stock market.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::32c7d735d4cadca3a6964d2e1d321cee https://doi.org/10.1093/rfs/hhaa065 Zobrazit plný text záznamu