Prior literature finds that earnings management is negatively correlated with institutional ownership. The question is whether institutional investors drive down earnings management of the firms they invest in, or they choose firms with lower earnings management. In this paper, we use the...

Future Economic Information Embedded in High Yield SpreadsThe financial accelerator mechanism, also called credit channel theory (Bernanke and Gertler [1995] and Bernanke and Gertler, and Gilchrist [1996]), assumes external financing is more costly than internal financing in the absence of full...

We extend previous studies on the effect of non-marketability on stock prices, and examine a very unique short-lived repeating non-marketability that lasts for only less than one day in China. Using the equity call warrants that are not subject to this trading constraint as a control, we provide...

In this paper, we study the performance of hated stocks, those stocks with the average analyst recommendation level of hold or worse. We show that from the beginning of 2009 to the end of 2014, this group of hated stocks in S&P 500 performs better than the other stocks in S&P 500. When we extend...

The underlying stochastic processes that drive returns in several emerging bond and stock markets are investigated using the pure diffusion, the jump diffusion, the ARCH pure diffusion, and the ARCH jump diffusion models. The results indicate that jump diffusion models fit the data better than...

This paper explores stock market reactions to corporate social performance. We find that a value-weighted portfolio based on the list of “100 Best CSR companies in the world” published by Reputation Institute yields annual abnormal returns of 2.74% and 1.98%, by controlling for Carhart four...

We analyze a bargaining game in which one party, called the buyer, is the active player and has the option of choosing the sequence of negotiations with other participants, called sellers. If the negotiations are public, the sellers who are negotiated with late in the sequence are in stronger...

This paper embeds security design in a model of evolutionary learning. We consider a competitive and perfect financial market where agents, as in Allen and Gale (1988), have heterogeneous valuations for cash flows. Our point of departure is that, instead of assuming that agents are endowed with...

We examine corporate security choice by simulating an economy populated by adaptive agents who learn about the structure of security returns and prices through experience. Each agent experiments with different strategies and, through a process of evolutionary selection, gravitates toward...