We study the interrelation between two types of risk sharing -- within the firm and on capital markets -- by analyzing … the effect of wrongful-discharge laws (WDLs) on stock returns. Consistent with rational, risk-based pricing, the effect on … returns is linked to how shareholders and workers share systematic risk via distinct channels of employment and wage …

on the exact design of the law. Consistent with rational, risk-based pricing, the effect on returns seems to be linked to … how firms share systematic risk with their employees under the respective laws. Firms in states with WDLs prohibiting … employers from acting in bad faith have more intra-firm risk sharing and lower expected returns. Vaguer legislation that …

considers the evidence on return predictability, risk aversion and market efficiency. The paper then focuses on the theoretical …

This paper is concerned with testing the time series implications of the capital asset pricing model (CAPM) due to … evidence against Sharpe-Lintner CAPM is found mainly during the recent financial crisis. Furthermore, a strong negative …

households reduce their financial risk exposure when confronted with background risk. Our novel modelling approach – termed a … risk, and is unique in recovering for, any given risky asset class, the shares that are reallocated to a safer asset … category. Background risk exerts a significant impact on household portfolios, resulting in a 'flight from risk', away from …