RT Journal Article
SR Electronic
T1 Is the Public Sector Generating Sufficient Revenue from Its Resources? <em>The Investment Behavior of Public and Private Firms</em>
JF The Journal of Private Equity
FD Institutional Investor Journals
SP 53
OP 59
DO 10.3905/jpe.2016.19.2.053
VO 19
IS 2
A1 Suresh Chandra Bihari
A1 Neeraj Sundar Pradhan
YR 2016
UL https://pm-research.com/content/19/2/53.abstract
AB Public and private firms invest differently. Stock markets provide investors with liquidity and opportunities for diversification and reduce firms’ cost of capital. The authors evaluate the differences in investment behavior between market-listed and privately held firms in India using a new data source on private firms. They observe that listed firms invest less and are less responsive to changes in investment opportunities than private firms. These differences are not because of unobserved differences between public and private firms, how they measure investment opportunities, or lifecycle differences. The patterns are consistent with theoretical models emphasizing the role of managerial myopia.TOPICS: Private equity, emerging, in portfolio management, quantitative methods