The Horizon of Investors’ Information and Corporate Investment

Seminar summary

We investigate whether the quality of investors’ information across horizons influences corporate investment. In our theory, managers under-invest because their stock price imperfectly reflects the value created by their projects. This effect is stronger when there is a mismatch between the horizon of the projects’ cash flows and the horizon at which investors obtain information. Using a new hand-collected measure of projects’ horizon, we find that improvements in the quality of investors’ long-term (short-term) information induce firms with long-term (short-term) projects to invest more, particularly when managers prioritize current stock prices. Hence, the quality of investors’ information across horizons matters.

How to attend this seminar

This seminar will take place online on Wednesday 13 March 2024 at 2pm.

The seminar free to attend, we ask you to please contact the organiser Dr Anna Sarkisyan for the zoom details.

Speaker bio

Dr Olivier Dessaint

Olivier Dessaint is an associate professor of finance at INSEAD. His research interests include corporate finance and behavioral finance. His work has been published in leading academic journals such as the Journal of Finance, the Journal of Financial Economics, the Review of Financial Studies, and the Review of Finance. Olivier is currently associate editor at the Journal of Financial and Quantitative Analysis and the Review of Finance.

Olivier holds a PhD in finance from HEC Paris. Prior to joining INSEAD, he was a faculty member at the Rotman School of Management from the University of Toronto in Canada. Before joining academia, he was also an investment banker at BNP Paribas.