Annual Conference

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International Macroeconomics, Money & Banking, Senior Fellows/Fellows

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May 2017

Bankers on Fed Boards: Is Good News for the Banks Bad News for the Fed?

Renee B. ADAMS
Bankers and non-bankers sit on Federal Reserve Bank Boards. In the case of banks, this may create a perception problem since the Fed supervises banks. I examine who sits on Reserve Bank boards and the market reaction to director appointments during the period 1990-2009. I document that Fed directors...
Keywords: Federal Reserve, Director, Banks, Conflicts of Interest, Reputation, Perception
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Annual Conference

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Accounting, Senior Fellows/Fellows

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May 2017

Bank Monitoring and Corporate Tax Planning: Evidence from Loan Covenants

Yupeng LIN, Zilong ZHANG, Xiangang XIN, Liandong ZHANG
This study examines the effect of bank monitoring on corporate tax planning behavior. To identify the causal effect, we use a regression discontinuity design, taking advantage of the discrete nature of bank control rights surrounding covenant violation thresholds. We find that strengthened bank moni...
Keywords: Bank monitoring, tax planning, loan covenants, cash tax savings, tax risk, regression discontinuity design
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Senior Fellows/Fellows

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Senior Fellows/Fellows

Augmenting Markets with Mechanisms

Samuel ANTILL, Darrell DUFFIE
We model a market in which traders lay off their excess inventories of an asset in a sequence of size-discovery sessions and on a continuously operating exchange. Taking the exchange as given, we derive a size-discovery mechanism that efficiently reallocates the asset across traders at each session...
Keywords: mechanism design, price impact, size discovery, allocative efficiency, workup, dark pool, market design
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Senior Fellows/Fellows

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Senior Fellows/Fellows

Attention, Social Interaction, and Investor Attraction to Lottery Stocks

David HIRSHLEIFER, Turan G. BALI, Lin PENG, Yi TANG
We test the hypothesis that retail investors' attraction to lottery stocks induces overvaluation, and is amplified by high attention and social interactions. The lottery premium (negative abnormal returns) is stronger for high-retail-ownership stocks—especially those that also have high analyst co...
Keywords: Preference for lottery-like stocks, investor attention, social interactions, social network, MAX, skewness, retail investors
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Annual Conference

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Investment Finance, Senior Fellows/Fellows

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May 2015

Are Shorts Equally Informed? A Global Perspective

Ekkehart BOEHMER, Zsuzsa. R. HUSZAR, Yanchu WANG, Xiaoyan ZHANG
Using a daily sample of 25 countries from 2006 to 2010, we examine whether information from shorts can significantly predict future stock returns across different countries. We construct seven shorting measures using past shorting transactions, and fees information in the lending market. The majorit...
Keywords: Pricing Efficiency, Short Selling, Costs of Short Selling, Short Sale Regulations
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