We analyze a sample of 72 IPO firms that went public between 1992 and 1996 for which we have detailed proprietary information about the amount and cost of Damp;O liability insurance. If managers of IPO firms are exploiting superior inside information, we hypothesize that the amount of insurance...

Managers choose to spend corporate resources to purchase directors' and officers' liability insurance, which protects directors and officers from personal financial liability in lawsuits brought against the firm and its directors and officers. We investigate whether the amount of Damp;O...

We hypothesize that a combination of indexing, industry and broader market forces create common effects in order flow and returns. We test the relative contribution of each to common effects in large samples of both index and non-index stocks. Common effects are strong in index constituent...

In this paper, we use index addition to gain insights into the trading behavior of informed traders. When a stock is added to the Samp;P 500 index, it attracts permanent interest from index funds, which are, by definition, liquidity traders. Consequently, this event is associated with an...

We examine the importance of indexing, industry, and broad market forces in driving common effects in order flow, returns, and trading costs. Common effects are strong for order flow and returns in a sample of S&P 500 stocks, but are weak in a sample of non-index stocks and for trading costs in...