We examine the real effects of stock market efficiency by analyzing how noise in stock prices affects the efficiency of capital allocation. Using data from 42 countries and a long time-series, we find that the efficiency of capital allocation across firms (the sensitivity of corporate investment...

Price limits are commonly adopted regulatory restrictions in financial markets, yet their impacts on market performance remain controversial. Exploiting a price-limit widening policy in China, we investigate the impacts of price limits using the difference-in-differences methodology. Stocks are...

Christian Funke aims at developing a better understanding of a central asset pricing issue: the stock price discovery process in capital markets. Using U.S. capital market data, he investigates the importance of mergers and acquisitions (MA) for stock prices and examines economic links between...