Document Type
Article
Publication Date
4-25-2025
Abstract
Market timing is a well-documented phenomenon in financial markets. This paper tests whether managers with heterogeneous talents and qualities affect capital issuance timing differently. I find that skilled managers raise more capital (especially equity) when the market is overpriced, compared to unskilled managers. However, capable managers are less willing to issue equity when firms have high growth potential and are reluctant to share their future success with newcomers. Additionally, I found no significant effect of managerial ability on the relationship between market misvaluation and subsequent corporate investment. Overall, consistent with the market timing hypothesis, the results suggest that talented managers are more likely to time the market, but they do not increase corporate investment in response to additional funding.
Digital Object Identifier (DOI)
https://doi.org/10.1007/s10690-025-09529-3
Repository Citation
Li, Keming, "Market Timing and Managerial Talent" (2025). All Faculty Scholarship. 58.
https://digitalcommons.tamusa.edu/pubs_faculty/58
Comments
Originally published as:
Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons license, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons license and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/.