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Investment, idiosyncratic risk, and ownership

Panousi, Vasia; Papanikolaou, Dimitris - Federal Reserve Board (Board of Governors of the … - 2011

High-powered incentives may induce higher managerial effort, but they also expose managers to idiosyncratic risk. If … managers are risk averse, they might underinvest when firm-specific uncertainty increases, leading to suboptimal investment … decisions from the perspective of well-diversified shareholders. We empirically document that when idiosyncratic risk rises …

Persistent link: https://www.econbiz.de/10009395278

A comparative anatomy of credit risk models

Gordy, Michael B. - Federal Reserve Board (Board of Governors of the … - 1998

Within the past two years, important advances have been made in modeling credit risk at the portfolio level … especially influential benchmarks for credit risk models, J.P. Morgan's CreditMetrics and Credit Suisse Financial Product …

Persistent link: https://www.econbiz.de/10005394134

Uncertainty and investment: an empirical investigation using data on analysts' profits forecasts

Bond, Stephen R.; Cummins, Jason G. - Federal Reserve Board (Board of Governors of the … - 2004

We investigate the empirical relationship between company investment and measures of uncertainty, controlling for the effect of expected future profitability on current investment decisions. We consider three measures of uncertainty derived from (1) the volatility in the firm's stock returns;...

Persistent link: https://www.econbiz.de/10005394186

Politics, economics and investment: explaining plant and equipment spending by U.S. direct investors in Argentina, Brazil, and Mexico

Stevens, Guy V.G. - Federal Reserve Board (Board of Governors of the … - 1994

Few economists or laymen would deny that political events can have an important, sometimes even overwhelming, impact on economic decisions in general, and investment decisions in particular. The first goal of this paper was to integrate a number of political and non-traditional economic...

Persistent link: https://www.econbiz.de/10005368143

Corporate governance and the shareholder base

Lins, Karl V.; Warnock, Francis E. - Federal Reserve Board (Board of Governors of the … - 2004

enough to fully compensate them for expected expropriation or increased estimation risk associated with expected poor …

Persistent link: https://www.econbiz.de/10005368318

Firm size and the impact of profit-margin uncertainty on investment: do financing constraints play a role?

Ghosal, Vivek; Loungani, Prakash - Federal Reserve Board (Board of Governors of the … - 1996

We study the response of investment to changes in uncertainty about future profits. We find that in industries dominated by small firms, an increase in uncertainty about future profits depresses investment; in all other industries, increased uncertainty has virtually no effect (or has a positive...

Persistent link: https://www.econbiz.de/10005368322

U.S. investors' emerging market equity portfolios: a security-level analysis

Edison, Hali J.; Warnock, Francis E. - Federal Reserve Board (Board of Governors of the … - 2003

home bias and that the benefits of international risk sharing are limited to select firms. …

Persistent link: https://www.econbiz.de/10005368338

Why do U.S. cross-listings matter?

Ammer, John; Holland, Sara B.; Smith, David C.; … - Federal Reserve Board (Board of Governors of the … - 2008

This paper investigates the underlying determinants of home bias using a comprehensive sample of U.S. investor holdings of foreign stocks. We document that U.S. cross-listings are economically important, as U.S. ownership in a foreign firm roughly doubles upon cross-listing in the United States....

Persistent link: https://www.econbiz.de/10005368393

Assessing the potential for further foreign demand for U.S. assets: Has financing U.S. current account deficits made foreign investors overweight in U.S. securities?

Bertaut, Carol C. - Federal Reserve Board (Board of Governors of the … - 2008

Since 2001, foreign investors have acquired roughly $5 trillion in U.S. securities--more than doubling their holdings of U.S. equities and bonds--as both official and private inflows have financed record U.S. current account deficits. Although the rapid growth of foreign holdings of U.S....

Persistent link: https://www.econbiz.de/10005368400

Financial centers and the geography of capital flows

Warnock, Francis E.; Cleaver, Chad - Federal Reserve Board (Board of Governors of the … - 2002

We examine an assumption common in empirical work on bilateral portfolio capital flows that the countries the flows are attributed to are also the countries of the security's issuer, seller, or ultimate buyer. We do this by estimating U.S. investors' holdings of debt and equities in over 40...

Persistent link: https://www.econbiz.de/10005368410