Abstract
This paper develops a novel strategy to test whether and to what extent firms learn from the stock market. Using data for the United Kingdom, I find that private firms' investment responds positively to the valuation of public firms in the same industry. The sensitivity increases with price informativeness. To establish causality, I construct a measure of price noise based on industry leaders' unrelated minor-segment business and show that it positively affects private firms' investment. The results are consistent with models featuring learning from noisy signals, and are not driven by alternative channels in the absence of learning.