In this paper, we investigate the effects of legal protection of investors and the equity-financing channel on the relationship between corporate investment and stock prices in an international setting. We find that firms in countries with stronger legal protection of investors have investments...

Based on a difference-in-differences approach, we find strong evidence that the initial enforcement of insider trading laws improves capital allocation efficiency. The effect is concentrated in developed markets and manifests shortly after the enforcement year. Cross-sectional analyses show that...

Using an international sample of firms from 28 countries, we document that there exists a negative relationship between political connections and the informativeness of stock price, as measured by idiosyncratic volatility (IV). This finding is robust to alternative regression specifications,...