The model and simulations of Berk, Green, and Naik (BGN, 1999) suggest that exercise of growth options alters firm-specific characteristics such as firm size (MVE) and book-to-market ratio (B/M) commensurately with changes in systematic risk. Consistent with BGN, we show empirically that...

Recent theoretical models (e.g., Carlson, Fisher and Giammarino, 2004) predict an association between the book-to-market (BE/ME) ratio and operating leverage in the cross-section. Consistent with these models, we find a strong positive association between BE/ME and the degree of operating...

We explore whether the well publicized anomalous returns associated with low-volatility stocks can be attributed to market mispricing or to compensation for higher systematic risk. Our results, conducted over a 46 year study period (1966-2011), indicate that the high returns related to...

We show that CEOs’ social capital has a positive impact on stock price informativeness in an international sample of 69 countries. While considering characteristics not observable within one country such as legal, cultural, and developmental differences, we uncover that for more developed...

The Middle East economies and their respective capital markets are a unique combination of extremes—from the vibrant, trade-based United Arab Emirates and resource rich Kuwait and Qatar to ones that are currently experiencing challenging times, such as Iraq and Lebanon.This brief covers the...

We investigate the association between CEOs’ social capital and stock price informativeness in a sample of US firms. After accounting for the fact that larger networks attract more analysts following, we find that firms with larger CEO social capital exhibit higher private information...