A recent reform in China, the Shanghai-Hong Kong Stock Connect program, made a subset of Chinese stocks investable for foreign investors, thus partially opening China's stock market. We use this reform to examine the quantity and quality effects of stock market liberalization on corporate...

Estimates of the expected return on equities are of central importance for capital budgeting purposes, actuarial calculations (expected wealth) and, in countries with regulated utilities, for setting the allowed rate of return. The starting point for any of these purposes is the simple annual...

Recent studies have shown the time trends of firm stock repurchase behavior. We examine these time changes for stock repurchase through the lens of real activities earnings management. Managers appear more likely to manipulate earnings through stock repurchases since the passage of the...

This paper shows that the presence of security lending supply before an initial public offering (IPO) reduces the initial stock return following IPO and improves subsequent long-run performance. We use a sample of British firms that go public via a two-stage IPO procedure where a firm becomes...

Using the Baker, Bloom, and Davis (2013) news-based measure to capture economic policy uncertainty (EPU) in the United States, we find that EPU positively forecasts log excess market returns. A one-standard deviation increase in EPU is associated with a 1.5% increase in forecasted 3-month...

This paper examines the effect of board governance on investment efficiency. I use the staggered enactment of board reforms in 41 countries as a shock to board structure that exogenously improves the quality of board oversight of managers. I find that investment–Q sensitivity improves by...

Using theories from the behavioral finance literature to predict that investors are attracted to industries with more salient outcomes and that therefore firms in such industries have higher valuations, we find that firms in industries that have high industry-level dispersion of profitability...

Building on recent developments in behavioral asset pricing, we develop a model in which an increase in the dispersion of investor beliefs under short-selling constraints predicts a "bubble," or a rise in a stock's price above its fundamental value. Our model predicts that managers respond to...

This study examines the impact of stock market liberalization on corporate investment and its underlying mechanisms in the context of the Mainland–Hong Kong Stock Connect programs in China. The difference-in-differences estimation suggests that stock market liberalization improves corporate...