We study the effect of investor horizons on corporate cash holdings. We argue that investors with longer horizons monitor more because their net benefit of monitoring is higher. Consequently, the optimal amount of corporate cash holdings increases, so firms hold more cash. We find empirical...

We study the effect of investor horizons on corporate behavior. We argue that longer investor horizons attenuate the effect of stock mispricing on corporate policies. Consistent with our argument, we find that when a firm is undervalued, greater long-term investor ownership is associated with...

Using a new measure of shareholder inattention based on exogenous industry shocks to institutional investor portfolios, we document a positive and significant relation between firms with distracted institutional shareholders and the cost of debt financing. This effect is stronger for firms with...