We use a proprietary dataset from a large Swiss retail bank to examine the impact of financial advice on individual investors’ stock trading performance and their behavioral biases. Our data allows us to classify each individual trade as either advised or independent and to compare them in a...

We present a new, regression-based methodology for decomposing the risk-adjusted performance of private investors, firms, and mutual funds. Our technique allows for the inclusion of multivariate and continuous subject characteristics in the analysis and it ensures that the statistical results...

We analyze the valuation effect of board industry experience and channels through which industry experience of outside directors affects firm value. Firms with more experienced outside directors are valued at a premium compared to firms with less experienced outside directors. Additional tests...

We study financial reporting and corporate governance in 216 U.S. companies accused of price fixing by antitrust authorities. We document a range of strategies used by these firms when reporting financial results, including frequent earnings smoothing, segment reclassification, and restatements....

We investigate whether investor reactions to the announcement of a new outside director appointment significantly depend on the director’s experience in the appointing firm’s industry. We use a sample of 385 outside directors appointed to the board of S&P 500 companies from 2008 to 2010. Our...

Exploiting a unique feature of the Clayton Antitrust Act, we analyze how directors holding outside directorships at peer firms affect firm value and performance of financial firms. We find that directors serving simultaneously at horizontally-related firms have a negative impact on firm value...

The issue of optimum bank scope is central to many proposals for banking system reform. For example, a core component of the Dodd-Frank Act (2010) and regulatory proposals in the UK and the EU has been the concept of “ring-fencing” – i.e., restricting banks’ activities to their core...

Relational contracts have been shown to mitigate moral hazard in labor and credit markets. A central assumption in most theoretical and experimental studies is that, upon misbehaving, agents can be excluded from their current source of income and have to resort to less attractive outside...

This paper examines whether investors receive a compensation for holding stocks with a strong sensitivity to extreme market downturns in a worldwide sample covering 40 different countries. I find that stocks with strong crash sensitivity earn higher average returns than stocks with weak crash...

In this paper, we show that large inflows into commodity investments, a recent phenomenon known as financialization, has changed the behavior and dependence structure between commodities and the general stock market. The common perception is that the increase in comovements is the result of...