Some investors (insiders) observe prices in real-time whereas other investors (outsiders) observe prices with a delay. As prices are informative about the asset payoff, insiders get a strictly larger expected utility than outsiders. Yet, information acquisition by one investor exerts a negative...

We study right offerings around the world, using a sample of 8,238 rights offers announced during 1995-2008 in 69 countries. Although shareholders prefer having the option to trade rights, issuers deliberately restrict tradability in 38% of the offerings. We argue that firms restrict rights...

Parent guarantees to subsidiary bond issues can circumvent restrictive covenants on parent debt, and transfer wealth from bond- to equity-holders or maximize parent managers' private benefits. We find that parent firms expecting stringent covenants on their own debt more likely guarantee...

We exploit the merger between BlackRock and Barclays Global Investors to study how changes in expected ownership concentration affect the investment behavior of funds and the cross-section of stocks worldwide. We find that funds with open-end structures and a large exposure to commonly-held...

We investigate whether short sellers are subject to the disposition effect using a novel dataset that allows to identify the weekly closing of short positions. Consistent with the disposition effect, the closing of short sale positions is strongly related to a proxy of Shortsale Capital Gains...

We investigate whether providers of high frequency news analytics affect the stock market. As identification, we exploit a unique experiment based on differences in news event classifications between different product releases of a major provider of news analytics. We document a causal effect of...

When companies raise equity finance they have to make two choices: the issuing method (cash versus rights) and, when they choose the rights issue method, whether rights should be traded or not. We study these choices using a sample of 15,751 rights issues and 22,016 cash offers announced during...

We study how a firm’s bond structure affects the pricing of its bonds and its base of bond investors. We define bond complexity as the tangle of contractual terms of all outstanding bonds of a firm, and find that it increases bond yield spreads. Specifically, a 1-standard deviation higher...

We study how actively managed equity mutual funds select the liquidity level of their equity portfolio and the effects of this selection on performance. We provide evidence of five key determinants of portfolio liquidity: portfolio size, portfolio concentration, the manager’s trading...

We study the link between portfolio choice and different college-based interaction – defined as the one that relates the portfolio choice of an investor to that of the other investors who went to the same college. We explain it in terms of a common cultural imprinting and the development of...