Options trading and firm investment efficiency

IF 2.2 3区管理学 Q2 BUSINESS, FINANCE

Journal of Business Finance & Accounting Pub Date : 2024-01-28 DOI:10.1111/jbfa.12789

Charles Hsu, Junqiang Ke, Zhiming Ma, Lufei Ruan

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Abstract

We examine the effect of options trading on an optioned firm's investment decisions. We find that active options trading improves an optioned firm's investment efficiency, and that this effect holds under several alternative empirical specifications and identification strategies, including fixed-effects models, different matching methods, an instrumental variable approach, a Granger causality test and a quasi-natural experiment based on the listing decisions of the options exchanges. This relation is mediated by two factors, namely, information asymmetry and uncertainty, consistent with the notion that options trading improves investment efficiency by providing information that facilitates external monitoring and managerial learning. The results of cross-sectional analyses indicate that the effect of options trading on investment efficiency increases with firms’ tendency to overinvest or underinvest, and with managers’ risk-taking and learning incentives. We also demonstrate that the effect of options markets on investment efficiency is distinct from the effect of stock markets. Overall, our findings suggest that options trading plays a nonnegligible role in improving an optioned firm's investment efficiency.

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期权交易与公司投资效率

我们研究了期权交易对期权公司投资决策的影响。我们发现，活跃的期权交易能提高期权公司的投资效率，而且在几种不同的实证规格和识别策略下，包括固定效应模型、不同的匹配方法、工具变量方法、格兰杰因果检验以及基于期权交易所上市决策的准自然实验，这种效应都是成立的。这种关系是由信息不对称和不确定性这两个因素促成的，与期权交易通过提供有利于外部监督和管理学习的信息来提高投资效率的观点一致。横截面分析的结果表明，期权交易对投资效率的影响随着企业过度投资或投资不足的倾向以及管理者的风险承担和学习动机而增加。我们还证明，期权市场对投资效率的影响不同于股票市场的影响。总之，我们的研究结果表明，期权交易在提高期权公司的投资效率方面发挥着不可忽视的作用。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Business Finance & Accounting BUSINESS, FINANCE-

CiteScore

4.40

自引率

17.20%

发文量

期刊介绍： Journal of Business Finance and Accounting exists to publish high quality research papers in accounting, corporate finance, corporate governance and their interfaces. The interfaces are relevant in many areas such as financial reporting and communication, valuation, financial performance measurement and managerial reward and control structures. A feature of JBFA is that it recognises that informational problems are pervasive in financial markets and business organisations, and that accounting plays an important role in resolving such problems. JBFA welcomes both theoretical and empirical contributions. Nonetheless, theoretical papers should yield novel testable implications, and empirical papers should be theoretically well-motivated. The Editors view accounting and finance as being closely related to economics and, as a consequence, papers submitted will often have theoretical motivations that are grounded in economics. JBFA, however, also seeks papers that complement economics-based theorising with theoretical developments originating in other social science disciplines or traditions. While many papers in JBFA use econometric or related empirical methods, the Editors also welcome contributions that use other empirical research methods. Although the scope of JBFA is broad, it is not a suitable outlet for highly abstract mathematical papers, or empirical papers with inadequate theoretical motivation. Also, papers that study asset pricing, or the operations of financial markets, should have direct implications for one or more of preparers, regulators, users of financial statements, and corporate financial decision makers, or at least should have implications for the development of future research relevant to such users.