It is well established that firms smooth out changes in their dividends relative to changes in their earnings. We do not, however, have a widely accepted theoreticalexplanation of this behavior. This paper rationalizes dividend smoothing by deriving the Lintner model as equilibrium behavior in...

In this paper, we focus on the board as an entity distinct from both management and shareholders and we examine how the board interacts with management and shareholders. The analysis centers on management's power in the selection and retention of board members and the effect that this power has...

This paper finds that aggregate security returns are strongly related to concurrent unexpected cash flows into mutual funds and unrelated to concurrent expected flows into mutual funds. The author finds no lags between mutual fund flows and security returns in either direction in weekly or...

We compare dividend policies of U.S. and Japanese firms, partitioning the Japanese data into keiretsu, independent, and hybrid firms. We examine the correlation between dividend changes and stock returns, and the reluctance to change dividends. Results are consistent with the joint hypotheses...

We investigate the bias in CRSP data due to missing returns for many of the stocks delisted from Nasdaq. We find that missing returns are far more common when the delisting is for reasons of poor performance, and we find the missing returns to be large and negative on average. This implies a...

We develop a dynamic model of the adoption of financial innovations. Each period, firms decide whether or not to adopt an innovation of uncertain value, and the profitability of each period's adoptions reveals information about the innovation?s value. We show that characteristics of financial...

This paper compares dividend policies of US and Japanese firms, partitioning Japanese data into keiretsu, independent, and hybrid firms. Patterns in the data are consistent with the hypothesis that Japanese dividends are less informative. Specifically, Japanese firms experience smaller stock...

This paper studies the problems that a mutual fund faces when its objective is to minimize the capital gains taxes of its investors, and it offers solutions to those problems. A tax-minimization fund will build up a large overhang of unrealized capital gains over time, and the overhang will...

We investigate the bias in CRSP's Nasdaq data due to missing returns for delisted stocks. We find that the missing returns are large and negative on average, and that delisted stocks experience a substantial decrease in liquidity. We estimate that using a corrected return of - 55 percent for...

We compare dividend policies of U.S. and Japanese firms, partitioning the Japanese data into keiretsu, independent, and hybrid firms. We examine the correlation between dividend changes and stock returns, and the reluctance to change dividends. Results are consistent with the joint hypotheses...