Do sophisticated players in the stock market, namely institutions, trade against intangible information, thereby mitigating the extent of overreaction?More generally, do trades by institutions tend to move asst prices toward or away from fundamental values?

Using comprehensive company-level ownership data from Japan, the authors found that the equity size premium correlates strongly with the investment flows of international institutional investors. When investment flows intensified and shifted into larger stocks in the mid-1990s, the equity size...

The consensus wisdom of active mutual fund managers, as reflected in their average over- and underweighting decisions, contains valuable information about future stock returns. Analyzing a comprehensive sample of active U.S. equity funds 1984-2008, we find that stocks heavily overweighted by...

In the late 1990s, the Japanese government initiated a number of reforms that resulted in lower transaction costs and made the Japanese equity market more attractive for foreign institutions. Following these changes, foreign institutional holdings more than doubled, providing an opportunity to...

Western contract law and the principle of freedom of contract are based on two premises: private ownership and a free market. This paper argues that freedom of contract is not applicable to Chinese state-owned enterprises due to the unique economic conditions surrounding Chinese SOEs:...

We propose a new measure, active fundamental performance (AFP), to identify skilled mutual fund managers. AFP evaluates fund investment skills conditioned on the release of firms' fundamental information. For each fund, we examine the covariance between deviations of its portfolio weights from a...

In the past 15 years, Delaware courts seem to have created a rule that allowed sophisticated parties to contract around fraud by using an unambiguous disclaimer and integration clause. Supposedly, an extra-contractual fraud claim would be dismissed had there been an unambiguous disclaimer....