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...

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...

The home bias in international portfolios has been explained by foreign investors' exposure to more severe moral hazard problems than domestic investors. A drop in expected returns will increase the likelihood of these hazards, causing foreign investors to react more strongly to profit warnings...

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...