Annual Conference

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Investment Finance, Senior Fellows/Fellows

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May 2021

Is Hard and Soft Information Substitutable? Evidence from the Lockdowns

Massimo MASSA, Jennie BAI
We study information substitutability in the financial market through a quasi-natural experiment: the pandemic-triggered lockdown that has hampered people's physical interactions hence the ability to collect, process, and transmit soft information. Exploiting the cross-sectional and time-series vari...
Keywords: Mutual Funds, Soft information, COVID-19, proximity investing, performance
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Annual Conference

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Investment Finance

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May 2021

Taking Sides on Return Predictability

R. David MCLEAN, Jeffrey PONTIFF, Christopher REILLY
We study how 9 different market participants trade with respect to 130 different stock return anomalies and how each participant’s trades predict returns. Retail investors trade against anomalies, while firms’ and short sellers’ trades agree with anomalies. Institutional portfolios are weighte...
Keywords: Trading, return predictability, retail investors, institutions.
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Annual Conference

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Corporate Finance

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May 2021

Competitive Effects of IPOs: Evidence From Chinese Listing Suspensions

Mark M. SPIEGEL, Frank PACKER
Theory suggests that initial public offerings (IPOs) can adversely impact listed firms, both directly by increasing intra-industry competition, and indirectly by completing related asset market spaces. However, the endogeneity of individual IPO activity hinders testing these channels. This paper exa...
Keywords: Initial public offerings, China, Competition, asset space
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Annual Conference

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Corporate Finance

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May 2021

Firm Boundaries and Political Uncertainty: Evidence from State Elections in India

Arkodipta SARKAR
Using subsidiary-level data for Indian firms and staggered elections across Indian states, I find that political uncertainty’s impact on firm performance varies by organizational form. I find that the gap in leverage ratio between subsidiaries of conglomerate and stand-alone firms widen by 15% in ...
Keywords: Conglomerate, stand-alone, Political uncertainty, Leverage, Misallocation
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Annual Conference

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Corporate Finance

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May 2021

The Political Economy of Anti-Bribery Enforcement

Bo LI, Lauren H. COHEN
This paper documents novel evidence on the influence of political incentives in the regulatory enforcement of foreign bribery. Using exogenous variation in the timing and geographic location of U.S. Congressional elections, we find that the probability of a Foreign Corrupt Practices Act (FCPA) enfor...
Keywords: Alternative Data, Satellite Imagery Data, Dividend Policy, Outcome Model, Substitute Model, Signaling Model, Corporate governance
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