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Legal Determinants of the Return on Equity

Lombardo, Davide; Pagano, Marco - C.E.P.R. Discussion Papers - 1999

Recent work documents that better legal institutions are associated with broader equity markets. We investigate whether international differences in legal institutions also help explain the international cross-section of expected stock returns. We document three main regularities. First, total...

Persistent link: https://www.econbiz.de/10005123538

The Political Economy of Finance

Pagano, Marco; Volpin, Paolo - C.E.P.R. Discussion Papers - 2002

The regulations that shape the design and the operations of corporations, credit and securities markets differ vastly from country to country. In addition, similar regulations are often unequally enforced in different countries. Economists still have an imperfect understanding of why these...

Persistent link: https://www.econbiz.de/10005124338

Law and Equity Markets: A Simple Model

Lombardo, Davide; Pagano, Marco - C.E.P.R. Discussion Papers - 1999

We analyze how the law and its enforcement affect equity market equilibrium. Improvements in the legal system, while invariably associated with broader equity markets, have different effects on equity returns depending on the institutional change considered and on the degree of international...

Persistent link: https://www.econbiz.de/10005792541

The Political Economy of Corporate Governance

Pagano, Marco; Volpin, Paolo - C.E.P.R. Discussion Papers - 2001

The Paper analyses the political decision that determines the degree of investor protection. We show that entrepreneurs and workers can strike a political agreement by which low investor protection is exchanged for high employment protection. This ‘corporatist’ agreement is feasible if the...

Persistent link: https://www.econbiz.de/10005666907

Shareholder Protection, Stock Market Development and Politics

Pagano, Marco; Volpin, Paolo - C.E.P.R. Discussion Papers - 2005

This paper presents a political economy model where there is mutual feedback between investor protection and stock market development. Better investor protection induces companies to issue more equity and thereby leads to a broader stock market. In turn, equity issuance expands the shareholder...

Persistent link: https://www.econbiz.de/10005789093

Corporate Fraud, Governance and Auditing

Immordino, Giovanni; Pagano, Marco - C.E.P.R. Discussion Papers - 2008

We analyze corporate fraud in a model in which managers have superior information but are biased against liquidation, because of their private benefits from empire building. This may induce them to misreport information and even bribe auditors when liquidation would be value-increasing. To curb...

Persistent link: https://www.econbiz.de/10005792136

Short-Selling Bans around the World: Evidence from the 2007-09 Crisis

Beber, Alessandro; Pagano, Marco - C.E.P.R. Discussion Papers - 2009

liquidity, especially for stocks with small market capitalization, high volatility and no listed options; (ii) slowed down price …

Persistent link: https://www.econbiz.de/10008474510

How Does Liquidity Affect Government Bond Yields?

Favero, Carlo A.; Pagano, Marco; von Thadden, Ernst-Ludwig - C.E.P.R. Discussion Papers - 2008

trend in yield differentials, which is correlated with a measure of aggregate risk. In contrast, liquidity differentials … display sizeable heterogeneity and no common factor. We propose a simple model with endogenous liquidity demand, where a bond …'s liquidity premium depends both on its transaction cost and on investment opportunities. The model predicts that yield …

Persistent link: https://www.econbiz.de/10005124174

Securitization, Transparency and Liquidity

Pagano, Marco; Volpin, Paolo - C.E.P.R. Discussion Papers - 2008

liquidity of their primary market, at the cost of reducing secondary market liquidity or even causing it to freeze. The degree … of transparency is inefficiently low if the social value of secondary market liquidity exceeds its private value. We … analyze various types of public intervention — mandatory transparency standards, provision of liquidity to distressed banks or …

Persistent link: https://www.econbiz.de/10005504512

Financial Disclosure and Market Transparency with Costly Information Processing

Di Maggio, Marco; Pagano, Marco - C.E.P.R. Discussion Papers - 2012

We study a model where some investors (“hedgers”) are bad at information processing, while others (“speculators”) have superior information-processing ability and trade purely to exploit it. The disclosure of financial information induces a trade externality: if speculators refrain from...

Persistent link: https://www.econbiz.de/10011083365