We show that a profit-maximizing entrepreneur may deliberately shun approaching a venture capitalist in the very first stages of a project's life. To avoid a potential moral hazard problem the entrepreneur will instead develop the project on his own up to a certain stage. By doing so, the...

This paper analyses the impact of information on international portfolio investments. We decompose information into two categories: information that is observable by investors from all countries (homogeneous), and information that differs in contents between countries (heterogeneous...

We use data on the country allocations of investors from several countries to test the hypothesis of Dahlquist et al. (2003). Our results show that the country allocation in the international portfolio of these investors do not seem to be influenced by the choice between the world market...

This paper analyzes how a prolonged external disequilibrium, that may arise if the exchange rate is pegged, will affect the stock market. It is shown that if the central bank refuses to adjust the peg in response to the disequilibrium, stock returns are expected to remain below their equilibrium...

This paper discusses the relationship between stock market liquidity and corporate governance. Both concepts are widely investigated from different angles in the literature. It is generally agreed that they are related so that better corporate governance implies higher liquidity for shares of...

This paper analyzes systematic deviations of the observed futures price from the value predicted by the simple cost-of-carry relationship. A model to explain this deviation (the basis) is presented in Chen, Cuny, and Haugen (1995, henceforth CCH). According to CCH, the basis should be negatively...

This paper advocates two ways to make more efficient use of available information in reducing the bias of the risk premium estimate in two-pass tests of the CAPM. First, explicit modeling of the time-variability of betas can improve the accuracy of the beta forecasts. Second, the cross-sectional...

Employees in Swedish firms have the legal right to be represented on the company board. However, in a considerable share of Swedish listed firms, this option is not exercised. This paper asks why that is the case. We use a simple framework, based on rational choice by individual employees. Our...

To study whether banks retain their lessons from the experience of a severe financial crisis, we examine the effects of the systemic banking crisis of the early 1990s in three Nordic countries (Finland, Norway, and Sweden). While this crisis largely bypassed the rest of Europe, we hypothesize...