A hotly debated question in finance is whether the higher stock returns under Democratic presidencies relative to Republican presidencies represent abnormal return, risk premium, or mere statistical fluke. This paper investigates whether this presidential premium is due to spurious-regression...

As tax-deferred saving is become increasingly popular, policy makers are keen on encouraging everyone in participating in tax-deferred saving plans. To pursue this goal, policy maker often increase contribution limits for tax-deferred savings. But whether this action is effective or not is not...

We present a life cycle model with diversification and tax-deferred investment opportunities. We find that investors should locate most of their taxable equities in the taxable brokerage account and taxable bonds in the tax-deferred retirement account irrespective of bequest motives when...

Using comprehensive bank-loan contract information, we show that the power of a firm relative to its suppliers eases its terms of bank financing, specifically through lower loan prices and less restrictive non-price contract terms. Our results are robust to controlling for product-market...

We investigate the secular increase in the corporate cash holding over the period 1980-2006. We show that along with firm characteristic–related variables, monetary policy and banking structure have a significant bearing on corporate cash holdings, as they determine the opportunity cost of...

The Tax-Free Savings Account (TFSA) is the new savings vehicle proposed under the 2008 federal budget. Most existing analyses find the TFSA to be comparable to the Registered Retirement Savings Plan (RRSP) as a retirement savings vehicle. However, given Canada's progressive tax rates and the...

Since 2009, Canadians have had the opportunity to contribute to tax-free savings accounts (TFSAs). This study provides insight into the attributes of the TFSA participants. I use data from the Canada Revenue Agency (CRA) for general participation trends and the 2012 Survey of Financial Security...

Many financial economists are puzzled by the fact that stock returns are higher under Democratic than Republican presidencies. In this paper, we test whether this return differential is explained by risk using a conditional version of the Fama and French (1993) model that allows risk to vary...

In this study, we find some evidence in favor of systematic risk being priced in the cross-section of stock returns when the effects of presidential cycles and political environments are taken into account. During Democratic presidencies or harmonious political environments, beta has a positive...