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Information and the cost of capital : the Easley-O’Hara (2004) model with endogenous information acquisition/ created by Greg Clinch and Brett Lombardi

By: Contributor(s): Material type: TextTextSeries: Australian journal of management ; Volume 36, number 1Los Angeles : Sage, 2011Content type:
  • text
Media type:
  • unmediated
Carrier type:
  • volume
ISSN:
  • 03128962
Subject(s): LOC classification:
  • HD31 AUS
Online resources: Abstract: We investigate the impact of endogenous information acquisition on Easley and O’Hara’s (2004) result that moving information from being publicly to privately available results in an increase in a firm’s cost of capital. As in Christensen et al. (2010), when the cost of information acquisition is fixed, Easley and O’Hara’s result reverses. We study two scenarios, however, where Easley and O’Hara’s result can continue to hold (i): where the cost of information acquisition is increasing in its precision, and (ii) where the benefits of acquiring private information span multiple firms.
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Holdings
Item type Current library Call number Vol info Status Notes Date due Barcode
Journal Article Journal Article Main Library - Special Collections HD31 AUS (Browse shelf(Opens below)) Vol. 36, no.1 (pages 05-14) Not for loan For in house use only

We investigate the impact of endogenous information acquisition on Easley and O’Hara’s (2004) result that moving information from being publicly to privately available results in an increase in a firm’s cost of capital. As in Christensen et al. (2010), when the cost of information acquisition is fixed, Easley and O’Hara’s result reverses. We study two scenarios, however, where Easley and O’Hara’s result can continue to hold (i): where the cost of information acquisition is increasing in its precision, and (ii) where the benefits of acquiring private information span multiple firms.

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