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A Theory of Income Smoothing When Insiders Know More Than Outsiders

Acharya, Viral V; Lambrecht, Bart - C.E.P.R. Discussion Papers - 2012

We consider a setting in which insiders have information about income that outside shareholders do not, but property rights ensure that outside shareholders can enforce a fair payout. To avoid intervention, insiders report income consistent with outsiders' expectations based on publicly...

Persistent link: https://www.econbiz.de/10011083832

Does Relationship Lending Require Opaque (and Conservative) Financial Reporting?

Bigus, Jochen; Hakenes, Hendrik - C.E.P.R. Discussion Papers - 2014

For many private firms, relationship lending is the only viable form of outside financing. Relationship lending typically relies on intertemporal loan pricing: losses from early years are recovered by information rents in later years, which stem from the lender's private information regarding...

Persistent link: https://www.econbiz.de/10011083940

Investor Protection and Equity-Holdings: An Explanation of Two Puzzles?

Giannetti, Mariassunta; Koskinen, Yrjö - C.E.P.R. Discussion Papers - 2003

We develop a model where wealthy investors have an incentive to become controlling shareholders because they can earn additional benefits by expropriating outside shareholders. As a consequence, in countries where minority investor rights are poorly protected, both domestic and foreign portfolio...

Persistent link: https://www.econbiz.de/10005114263

Which Investors Fear Expropriation? Evidence from Investors' Stock Picking

Giannetti, Mariassunta; Simonov, Andrei - C.E.P.R. Discussion Papers - 2003

Using a data-set that provides unprecedented details on individual investors’ stockholdings, we analyse whether investors take into account corporate governance when they select stocks. After controlling for the supply effect via free float and other firm characteristics, we find that all...

Persistent link: https://www.econbiz.de/10005114455

Optimal portfolio allocation for corporate pension funds

McCarthy, David; Miles, David K - C.E.P.R. Discussion Papers - 2011

We model the asset allocation decision of a stylized corporate defined benefit pension plan in the presence of hedgeable and unhedgeable risks. We assume that plan fiduciaries--who make the asset allocation decision--face non-linear payoffs linked to the plan’s funding status because of the...

Persistent link: https://www.econbiz.de/10008854488

A Portfolio Approach to a Cross-sectoral and Cross-National Investment Strategy in Transition Economies

Buiter, Willem H.; Lago, Ricardo; Rey, Hélène - C.E.P.R. Discussion Papers - 1997

This paper takes a systematic look at the portfolio choice problem faced by investment banks or funds investing in transition economies. We relate the performance of projects in the transition economies to the broader macroeconomic and international environment, which affect the project through...

Persistent link: https://www.econbiz.de/10005661678

Limits of Limits of Arbitrage: Theory and Evidence

Hombert, Johan; Thesmar, David - C.E.P.R. Discussion Papers - 2009

We present a model where arbitrageurs operate on an asset market that can be hit by information shocks. Before entering the market, arbitrageurs are allowed to optimize their capital structure, in order to take advantage of potential underpricing. We find that, at equilibrium, some arbitrageurs...

Persistent link: https://www.econbiz.de/10005666728

Optimal Portfolio Allocation for Corporate Pension Funds

McCarthy, David; Miles, David K - C.E.P.R. Discussion Papers - 2007

We model the asset allocation decision of a defined benefit pension fund using a stochastic dynamic programming approach. Our model recognizes the fact that asset allocation decisions are made by trustees who are mandated to act in the best interests of beneficiaries - not by sponsoring...

Persistent link: https://www.econbiz.de/10005123770

Entrepreneurial Incentives in Stock Market Economies

Acharya, Viral V; Bisin, Alberto - C.E.P.R. Discussion Papers - 2002

which the objectives of managers and entrepreneurs in choosing the risk composition of their firms' returns are not aligned … managers and entrepreneurs to unhedgeable firm-specific risk, induces them to change the stochastic properties of firm cash … flows. Since they can trade in markets for aggregate risk but not for firm-specific risk, managers and entrepreneurs produce …

Persistent link: https://www.econbiz.de/10005124325

Stock Market Returns, Corporate Governance and Capital Market Equilibrium

Parigi, Bruno; Pelizzon, Loriana; von Thadden, Ernst-Ludwig - C.E.P.R. Discussion Papers - 2015

firm's earnings, stock returns, and managerial ownership, because governance impacts the firm's risk-return structure. In …

Persistent link: https://www.econbiz.de/10011165663

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