Higher CEO incentives can both reduce the conflict between management and shareholders, thereby making blockholder monitoring less necessary (“substitution effect”), and increase the ability to punish recalcitrant CEOs through blockholder’s exit, thereby making blockholder monitoring more...

Investor sentiment affects stock market liquidity by affecting noise trading and irrational market makers. Previous studies have focused on this effect with the time-series variation in sentiment and liquidity. This paper utilizes firm-specific news sentiment (FSNS) to examine its effect on...

Actively managed mutual funds have distinct return distributions from their passive benchmarks and our theoretical analysis using tail-sensitive risk preferences suggests that active value and growth funds may serve to reduce downside risk and capture upside potential, respectively. Furthermore,...