The informational role of strategic insider trading around corporate dividend announcements is studied based on the efficient equilibrium in a signaling model with endogenous insider trading. Insider trading immediately prior to the announcement of dividend initiations has significant...

A cash-in-advance model of a monetary economy is used to derive a money-based capital asset pricing model (M-CAPM), which allows the authors to implement tests of asset pricing restrictions without consumption data. A test as in Eugene F. Fama and James D. Macbeth (1973) of the model suggests...

This paper provides a test of whether capital structure decisions are at least in part motivated by managerial self-interest. It is show n that the debt ratio is negatively related to management's sharehold ing, reflecting the greater nondiversifiable risk of debt to manageme nt than to public...

The authors devise tests that distinguish between competitive (Walrasian), fully revealing rational expectations and noisy rational expectations equilibria based on their predictions concerning trading volume around public information signals. Empirical results strongly support the noisy...

In this paper, the authors show that Tobin's q and firm diversification are negatively related throughout the 1980s. This negative relation holds for different diversification measures and when they control for other known determinants of q. Further, diversified firms have lower q's than...

Employing commodity flow data from input-output (IO) tables, we construct two IO-based measures to capture interindustry and intersegment vertical relatedness and complementarity. At the industry level, we demonstrate that the new IO-based measures outperform traditional measures based on...