Research Summary
Research Summary
Markets, Information, and Efficiency
Description
Professor Meulbroeks market efficiency research focuses on the closely related questions of whether markets properly reflect information that affects a firm's value, and in turn how stock prices influence managerial behavior. In this area, she studies why some firms have large amounts of short interest, whether short sales are a reflection of negative information that a stock price has yet to incorporate, and how the price reaction to short sales depends upon the context in which a firm is shorted. Finally, Professor Meulbroek is investigating (with Professor Mark Mitchell) the potential role of the market in managerial decision-making, asking how frequently the stock market is correct in its response to the announcement of managers investment decisions. To analyze the accuracy of the stock market, they compare the initial stock price response at investment announcement to the ex-post outcome of the project.