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| Tekijä: | Faure-Grimaud, A. |
| Otsikko: | Using stock price information to regulate firms |
| Lehti: | Review of Economic Studies
2002 : JAN, VOL. 69:1(238), p. 169-190 |
| Asiasana: | Share prices Capital investment Business information |
| Vapaa asiasana: | Stock prices |
| Kieli: | eng |
| Tiivistelmä: | The author examines the role of the information contained in stock prices in the regulation of privatized firms. Stock prices contain noisy but unbiased information about firm's future prospects that regulators can use to decide on some regulatory policies. The main argument developed is that the observation of stock price movements reduces the incentives of regulators to develop their own monitoring technologies and can allow them to commit to relatively lighthanded regulations. This protects firm's investments in cost reduction activities and can increase ex ante welfare. |
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