Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 10, 2020 erstellt
Description:
We document novel facts about the U.S. stock market during the past forty years which show opposing characteristics to the prior decades: A negative cross-sectional correlation between firms' investment and profitability, and strong premia of investment and profitability factors which are positively correlated. A model of firms with heterogeneous cash flow duration explains these findings: Firms with higher duration have lower discount rates, leading them to invest more despite having lower current profitability. An influx of high-duration firms boosted investment and profitability premia due to the duration premium. These nuances do not exist in countries where long-term investments are scarce