We find that actively managed mutual funds have higher ownership in pure-play firms than in conglomerates. The results show that fund managers’ industry expertise explains this preference because investing in pureplays allows the industry expertise to concentrate in one industry and investing...

Fundamental innovation usually involves huge upfront costs, but the benefits are spread across various sectors of the economy. Given the large costs and limited appropriability of the benefits associated with fundamental innovations, individual firms underinvest in these innovations relative to...

This study predicts stock splits using two ensemble machine learning techniques: gradient boosting machines (GBMs) and random forests (RFs). The goal is to form implementable portfolios based on positive predictions to generate abnormal returns. Since splits are rare events, we use SMOTE...