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...

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...

Firms changing their listing from the less regulated AIM to the more regulated main section of the London Stock Exchange exhibit positive returns on the day the decision is announced, while for firms moving in the opposite direction both announcement and implementation day returns are negative....

This paper examines investors' reactions to dividend reductions or omissions conditional on past earnings and dividend patterns for a sample of 82 U.S. firms that incurred an annual loss during the period 1986-2003. We document that the market reaction for firms with long patterns of past...

We examine the relation between an ex ante measure of IPO growth prospects – the industry-level long-term analyst earnings growth forecast – and short- and long-run IPO returns, using a sample of 7,570 IPOs from 1982 to 2007. The use of an industry-level, rather than firm-level growth...

We use price pressure resulting from purchases by mutual funds with large capital inflows to identify overvalued equity. This is a relatively exogenous overvaluation indicator as it is associated with who is buying, buyers with excess liquidity, rather than what is being purchased. We document...

We analyze whether paying CEOs with inside debt (pensions and deferred compensation) benefits shareholders. We find that stock price reaction to initial revelation of inside debt information following the SEC amendment is significant and positive, albeit delayed. In the subsequent revelation of...

The long-run abnormal returns following both stock repurchases and seasoned equity offerings disappear for the events in the most recent decade. The disappearance is associated with the changing market environment – increased institutional investment, decreased trading costs, improved...

Previous studies rarely discuss the effect of margin trading on future stock price crash risk, though margin trading is often blamed for destabilizing stock market. We propose three possible mechanisms through which margin trading may affect crash risk. Our empirical results show that neither...

Can an earnings announcement decrease disagreement about fundamentals while simultaneously increasing disagreement about price? Recent theory suggests the presence of short-horizon investors can lead to a polarization of higher-order beliefs about price (i.e., beliefs regarding the opinions of...