This research project analyzes the ways in which an important financial institution, the stock market, affects the economic performance of the industrial corporations that are listed on it.
The theory of innovative enterprise provides the foundation for a critique of the prevailing ideology that, through the “maximization of shareholder value,” corporate resource allocation contributes to the superior performance of the economy as a whole. This project furthers the understanding of the interaction of corporate resource allocation decisions and stock-price movements and thereby sheds light on economic perspectives on the stock market, such as the efficient market hypothesis, behavioral finance, information asymmetries, and financial instability.
