We identify an important channel, i.e., corporate investment decision, via which the governance through trading (GTT) improves firm values. Our GTT measure is positively related to subsequent Tobin’s Q, ROA, and acquirer returns. The disciplinary effect of GTT is more pronounced for firms with higher managerial wealth-performance sensitivity and moderate institutional ownership concentration. The effect is stronger after Decimalization and robust to using two IVs. We conduct several exercises to rule out alternative explanations, such as institutional superior information, investor activism, and momentum. Falsification tests show that the disciplinary effect of GTT only exists for less-financially-constrained firms and non-all-cash M&As.