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Cited by 785

The DOI matches its Crossref record; 61 of the 61 references it cites were found in a registry or an index.

When Does the Market Matter? Stock Prices and the Investment of Equity-Dependent Firms

Open access
Baker, Malcolm, Stein, Jeremy, Wurgler, Jeffrey·2002·National Bureau of Economic Research
DOI 10.3386/w8750
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Abstract

We use a simple model of corporate investment to determine when investment will be sensitive to non-fundamental movements in stock prices.The key cross-sectional prediction of the model is that stock prices will have a stronger impact on the investment of firms that are "equity dependent" -firms that need external equity to finance their marginal investments.Using an index of equity dependence based on the work of Kaplan and Zingales (1997), we find strong support for this prediction.In particular, firms that rank in the top quintile of the KZ index have investment that is almost three times as sensitive to stock prices as firms in the bottom quintile.We also verify several other predictions of the model.

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Metadata

Authors
Baker, M., Stein, J., & Wurgler, J.
Venue
National Bureau of Economic Research
Publisher
National Bureau of Economic Research
Published
2002-01
DOI
10.3386/w8750
OpenAlex
W3123833694
Cited by
785
References
61
Type
report
Language
en
Open access
green

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CoChat. (2026). Citation check: When Does the Market Matter? Stock Prices and the Investment of Equity-Dependent Firms. https://app.cochat.ai/papers/10.3386/w8750
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Baker, M., Stein, J., & Wurgler, J. (2002). When Does the Market Matter? Stock Prices and the Investment of Equity-Dependent Firms. National Bureau of Economic Research. https://doi.org/10.3386/w8750

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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.