Boom and Gloom

Paul Povel, Giorgo Sertsios, Renáta Kosová, Praveen Kumar

Research output: Contribution to journalArticlepeer-review

8 Scopus citations

Abstract

We study the performance of investments made at different points of an investment cycle. We use a large data set covering hotels in the United States, with rich details on their location, characteristics, and performance. We find that hotels built during hotel construction booms underperform their peers. For hotels built during local hotel construction booms, this underperformance persists for several decades. We examine possible explanations for this long-lasting underperformance. The evidence is consistent with information-based herding explanations.

Original languageEnglish
Pages (from-to)2287-2332
Number of pages46
JournalJournal of Finance
Volume71
Issue number5
DOIs
StatePublished - 1 Oct 2016

Bibliographical note

Publisher Copyright:
© 2016 the American Finance Association

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