Mutual fund managers may decide to deviate from a well-diversified portfolio and concentrate their holdings in industries where they have informational advantages. In this paper, we study the relation between the industry concentration and the performance of actively managed U.S. mutual funds...

Despite extensive disclosure requirements, mutual fund investors do not observe all actions of fund managers. We estimate the impact of unobserved actions on fund returns using the return gap - the difference between the reported fund return and the return on a portfolio that invests in the...

Despite extensive disclosure requirements, mutual fund investors do not observe all actions of fund managers. We estimate the impact of unobserved actions on fund returns using the return gap-the difference between the reported fund return and the return on a portfolio that invests in the...

We propose a simple model that relates skills of a fund manager to his reliance on public information -- the main implication being that the sensitivity of a manager's holdings to changes in public information decreases in his skill level. We estimate this sensitivity (RPI) as the R^2 of the...

We examine the impact of operating flexibility on firms' costs of equity by focusing on the constraints that labor unions impose on firms' operations. We find that the cost of equity is higher for firms in more unionized industries. The effect holds after we control for a host of industry- and...

We study the impact of a powerful non-financial stakeholder ndash; unionized workers ndash; on the pricing of corporate debt. Firms in more unionized industries have lower bond yields. This relation is stronger in firms with weaker financial conditions and cannot be explained by the correlation...

We attempt to measure the effect of competition on bias in the context of analyst earnings forecasts, which are known to be excessively optimistic due to conflicts of interest. Our instrument for competition is mergers of brokerage houses, which result in the firing of analysts because of...

We attempt to measure the effect of competition on bias in the context of analyst earnings forecasts, which are known to be excessively optimistic due to conflicts of interest. Our instrument for competition is mergers of brokerage houses, which result in the firing of analysts because of...

We provide evidence for the effects of social norms on markets by studying quot;sinquot; stocks - publicly-traded companies involved in producing alcohol, tobacco, and gaming. We hypothesize that there is a societal norm to not fund operations that promote vice and that some investors,...

We show theoretically that the responsiveness of a fund manager's portfolio allocations to changes in public information decreases in the manager's skill. We go on to estimate this sensitivity RPI as the R-square of the regression of changes in a manager's portfolio holdings on changes in public...