Firms differ in the extent to which they "pass-through" changes in exchange rates into the prices they charge in foreign markets. They also differ in their "exposure" to exchange rates--the responsiveness of their profits to changes in exchange rates. Because pricing directly affects...

In an integrated world capital market, the same pricing kernel is applicable to all securities. We apply this idea to the stock returns of different countries. We investigate the underlying determinants of cross-country stock return correlations. First, we determine, for a given, measured degree...

Based on basic financial models and reports in the business press, exchange rate movements are generally believed to affect the value of nonfinancial firms. In contrast, the empirical research on nonfinancial firms typically produces fewer significant exposures estimates than researchers...

We develop and test a theory to explain the variation in institutional ownership, analyst following and share price levels across firms. In addition to analysts that generate information about firms, our model incorporates the possibility that institutions can monitor the firms they own and...