We examine whether equity issuances (IPOs and SEOs) are in part driven by investor sentiment by using equity mutual fund flows to proxy for the rational and/or irrational components of aggregate demand for equity. We find that more firms issue equity when flows are higher and repurchase equity...

This paper examines how the extent of short-term trading relates to the efficiency of stock prices. We employ a new duration measure based on quarterly institutional investors' portfolio holdings, next to existing proxies such as trading volume, the percentage of transient institutions, and fund...

We investigate whether access to information prior to an IPO generates a trading advantage after the IPO. We find that limited partners (LPs) of venture capital funds obtain high returns when they invest in newly listed stocks backed by their funds. These returns are not explained by LPs'...

We propose a simple measure of investor sophistication based on financial statement experience derived from publicly available EDGAR log data about accounting information acquisition activity. This approach allows us to provide unique empirical evidence for the existence of attention induced...

The literature suggests that underwriters perform significant marketing functions in securities offerings. We argue that underwriter’s efforts related to marketing can be estimated by the abnormal component of IPO underwriting spread. This is feasible using a large sample of Chinese IPOs,...