This paper examines the revealed preferences of institutional investors for firm policies. I find that institutional investors are a heterogeneous group as they exhibit systematic differences in terms of the financial and investment policies of their shareholdings. The null hypothesis that the...

One of the most prominent stylized facts in corporate finance is that equity issues tend to follow periods of high stock returns. We document that firms exhibit such timing behavior only in response to high returns that coincide with strong institutional investor demand. When not accompanied by...

Although investors' preference for nearby investments has been widely documented in the literature, there is no apparent consensus on whether local investors have any informational advantage. Analyzing the equity holdings of a large sample of actively managed mutual funds, I find evidence...

We introduce a novel concept of the activeness of internal capital allocations across industries. We derive a measure of this activeness and use it to compare the performance of firms with different capital allocation styles. We find that firms that actively change their capital allocation...

We introduce a novel concept of the activeness of internal capital allocations across industries. We derive a measure of this activeness and use it to compare the performance of firms with different capital allocation styles. We find that firms that actively change their capital allocation...

We study the effects of local religious beliefs on mutual fund risk-taking behaviors. Funds located in <i>low</i>-Protestant or <i>high</i>-Catholic areas exhibit significantly higher fund return volatilities. Similar differences persist when we use the religiosity ratios at fund managers' college locations....

This study finds that actively managed mutual funds do not display abnormal superior performance in local stocks relative to their own performance in distant stocks. However, the trading behavior of these funds is consistent with a widespread perception that local funds have an informational...

We find that a firm's tendency to engage in financial misconduct increases with the misconduct rates of neighboring firms. This appears to be caused by peer effects, rather than exogenous shocks like regional variation in enforcement. Effects are stronger among firms of comparable size, and...