This paper explores the ability of financial analysts to gauge the risk taken by banks and investigates the impact of the recent financial crisis. Using a sample of 36,343 analyst forecasts issued for 411 European banks over 2003-2009 we find that analyst forecasts are influenced by risk, the...

This paper studies the sociological influence of religion on the risk and return in the financial markets with particular context of Islamic finance. The paper builds a theoretical model to show how intermediaries serve their customers' religious needs by creating innovative Islamic financial...

Using equity returns on all banks (across 28 countries) that ever issued contingent convertiblecapital securities (CoCos), we identify a “CoCo-induced collapse option,” that apparently was exercised during the March 2023 failure of Credit Suisse. Reflecting this option’s value, abnormal...

This paper examines the effect of accounting conservatism on firm-level investment during the 2007-2008 global financial crisis. Using a differences-in-differences design, we find that firms with less conservative financial reporting experienced a sharper decline in investment activity following...

This paper brings structural modeling to the literature on financial research in marketing. I estimate a dynamic investment-based model to understand the impact of advertising expenditures on stock returns and firm value. In addition, by interpreting advertising expenditures as an investment...

This research examines the long-run Initial Public Offerings (IPO) stock performance of a large Chinese sample, and in particular the relationship between initial reserves (capital reserves and revenue reserves immediately after the IPO) and long-run IPO stock performance. In general, Chinese...

We investigate the “new equity puzzle” using an approach that allows us to analyze the structural change in both alpha and systematic risk after the event. Brav, Geczy, and Gompers (2000) and Eckbo, Masulis, and Nodi (2000) cast doubt on the validity of matched-firm adjusted returns as a...

This paper examines the excess bond return in a sample of IPO announcements from 1983-2007 for firms with publicly trade debt. The main finding is that IPO announcements create a positive abnormal bond return. This finding is not driven by reverse LBOs, venture backing, spinoffs or by a...

We show that the credit quality of corporate debt issuers deteriorates during credit booms, and that this deterioration forecasts low excess returns to corporate bondholders. The key insight is that changes in the pricing of credit risk disproportionately affect the financing costs faced by low...