It is generally accepted that excessive exuberance or gloom in investor sentiment contributes to booms and crashes in asset prices but, because of its complex interaction with other aspects of the valuation process, these effects are not easy to identify with statistical confidence and this...

We study whether managers' are correct in their perception that investors are myopic towards more ‘innovative' investments, defined in this paper as those in research and development (R&D) and information technology (IT). We first examine the stock market's relative response to investments...