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...

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...

The Nordic Region is remarkable in many ways and has been the subject of increasing interest over the past years. The five countries of Denmark, Finland, Iceland, Norway and Sweden are culturally closely aligned and combine a well-functioning business sector and high GDP with an expansive...

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...