Growth vs. margins: destabilizing consequences of giving the stock market what it wants
"We develop a multi-tasking model in which a firm can devote its efforts either to increasing sales growth, or to improving per-unit profit margins by, e.g., cutting costs. If the firm's manager is concerned with the current stock price, she will tend to favor the growth strategy at those...
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| Main Authors: | , |
|---|---|
| Format: | Book |
| Language: | English |
| Published: |
Cambridge, Mass.
National Bureau of Economic Research
2004
|
| Series: | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series
10999 |
| Subjects: | |
| Online Access: | kostenfrei |
| Summary: | "We develop a multi-tasking model in which a firm can devote its efforts either to increasing sales growth, or to improving per-unit profit margins by, e.g., cutting costs. If the firm's manager is concerned with the current stock price, she will tend to favor the growth strategy at those times when the stock market is paying more attention to performance on the growth dimension. Conversely, it can be rational for the stock market to weight observed growth measures more heavily when it is known that the firm is following a growth strategy. This two-way feedback between firm's business strategies and the market's pricing rule can lead to purely intrinsic fluctuations in sales and output, creating excess volatility in these real variables even in the absence of any external source of shocks"--National Bureau of Economic Research web site. |
| Physical Description: | 30, [3] S. graph. Darst. |
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| indexdate | 2024-07-09T20:08:21Z |
| institution | BVB |
| language | English |
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| spelling | Aghion, Philippe 1956- Verfasser (DE-588)124546706 aut Growth vs. margins destabilizing consequences of giving the stock market what it wants Philippe Aghion ; Jeremy C. Stein Cambridge, Mass. National Bureau of Economic Research 2004 30, [3] S. graph. Darst. txt rdacontent n rdamedia nc rdacarrier National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 10999 "We develop a multi-tasking model in which a firm can devote its efforts either to increasing sales growth, or to improving per-unit profit margins by, e.g., cutting costs. If the firm's manager is concerned with the current stock price, she will tend to favor the growth strategy at those times when the stock market is paying more attention to performance on the growth dimension. Conversely, it can be rational for the stock market to weight observed growth measures more heavily when it is known that the firm is following a growth strategy. This two-way feedback between firm's business strategies and the market's pricing rule can lead to purely intrinsic fluctuations in sales and output, creating excess volatility in these real variables even in the absence of any external source of shocks"--National Bureau of Economic Research web site. Ökonometrisches Modell Corporations Finance Econometric models Stocks Econometric models Stein, Jeremy C. 1960- Verfasser (DE-588)124771726 aut Erscheint auch als Online-Ausgabe National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 10999 (DE-604)BV002801238 10999 http://papers.nber.org/papers/w10999.pdf kostenfrei Volltext |
| spellingShingle | Aghion, Philippe 1956- Stein, Jeremy C. 1960- Growth vs. margins destabilizing consequences of giving the stock market what it wants National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series Ökonometrisches Modell Corporations Finance Econometric models Stocks Econometric models |
| title | Growth vs. margins destabilizing consequences of giving the stock market what it wants |
| title_auth | Growth vs. margins destabilizing consequences of giving the stock market what it wants |
| title_exact_search | Growth vs. margins destabilizing consequences of giving the stock market what it wants |
| title_full | Growth vs. margins destabilizing consequences of giving the stock market what it wants Philippe Aghion ; Jeremy C. Stein |
| title_fullStr | Growth vs. margins destabilizing consequences of giving the stock market what it wants Philippe Aghion ; Jeremy C. Stein |
| title_full_unstemmed | Growth vs. margins destabilizing consequences of giving the stock market what it wants Philippe Aghion ; Jeremy C. Stein |
| title_short | Growth vs. margins |
| title_sort | growth vs margins destabilizing consequences of giving the stock market what it wants |
| title_sub | destabilizing consequences of giving the stock market what it wants |
| topic | Ökonometrisches Modell Corporations Finance Econometric models Stocks Econometric models |
| topic_facet | Ökonometrisches Modell Corporations Finance Econometric models Stocks Econometric models |
| url | http://papers.nber.org/papers/w10999.pdf |
| volume_link | (DE-604)BV002801238 |
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