Effects Of The Noise Of Peer Stock Price On Corporate Investment

Investment is not only related to the development of enterprises,but also has a profound impact on the real economy.In the past literature,research shows that stock price will have a feedback effect on investment.However,most of the research is based on the company's stock price and stock price noise.Less research involves peer stock price and peer stock price noise.However,it is often observed in the market that a company's stock price movement affects other related companies' investments,which is reflected in the “Ripple Effect”of the stock price.This paper mainly makes assumptions and analysis on the existence and mechanism of this phenomenon.Therefore,this paper takes the relationship between peer stock price noise and investment decision of China's A-share manufacturing listed companies from 2007 to2017 as the research object.This paper firstly uses Tobin Q as the proxy variable of the company's stock price,and constructs two indicators of peer stock price and stock price noise.The regression results show that after controlling the fundamental stock price and stock price noise of the company,the fundamental price of the peer company and stock price noise will have a significant positive effect on investment spending.Secondly,this paper gradually verifies the interpretation of equity financing channels,catering to investment channels and information channels to the“Ripple Effect”.The study finds that non-financing-constrained enterprise investment-stock price noise sensitivity is higher.When operating efficiency is improved,it will only reduce the impact of the company's stock price noise on investment,so only the information mechanism can effectively explain,and when peers' stock prices are more informative,the“Ripple Effect”of peer stock price noise on investment is stronger.Finally,in view of the characteristics of the information mechanism,this paper puts forward three suggestions from the perspectives of information disclosure,information producers and information receivers.It can help managers make full use of peer stock price information before investment decisions to improve investment efficiency.