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Debtor income manipulation in consumer credit contracts J. Financ. Econ. (IF 8.238) Pub Date : 2024-05-10 Vyacheslav Mikhed, Sahil Raina, Barry Scholnick, Man Zhang
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Female executive and energy consumption intensity: The role of green innovation Finance Research Letters (IF 10.4) Pub Date : 2024-05-07 Yu Li, Yi Zhu, Weijie Tan, Tiange Qi, Yongjian Huang
We widely explore the positive effect of female executives on ECI, the energy consumption per unit of output. We find that female executives will promote ECI reduction of corporate. And the result holds after a series of robustness and endogeneity tests. Further analysis indicates that the positive effect will be stronger in enterprises with lower level of environmental regulation, in heavily polluting
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Teams and Bankruptcy Rev. Financ. Stud. (IF 8.414) Pub Date : 2024-05-07 Ramin P Baghai, Rui C Silva, Luofu Ye
We study how the human capital embedded in teams is affected by, and reallocated through, corporate bankruptcies. After a bankruptcy, U.S. inventors produce fewer and less impactful patents. Moreover, teams become less stable. Consequently, compared to inventors that rely less on teamwork, the performance of team inventors deteriorates more. These findings point to the loss of team-specific human capital
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Associative memory, beliefs and market interactions J. Financ. Econ. (IF 8.238) Pub Date : 2024-05-07 Benjamin Enke, Frederik Schwerter, Florian Zimmermann
Recent theories and narratives highlight the potential role of associative recall in driving overreaction in expectations and market behavior. Based on a simple model, we test this idea through a series of experiments in which news are communicated with memorable contexts. Because the experimental participants predominantly remember those past news that get cued by new information, their beliefs about
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Payment card interchange fee regulation and financial institutions: The effects on traditional and fintech financial conglomerates* Finance Research Letters (IF 10.4) Pub Date : 2024-05-06 Klenio Barbosa, Bruno de Paula Rocha, Luan Michel Pereira, Luiz Fernando Passos
This paper investigates the effects of credit card interchange fee regulation on the performance of traditional and fintech financial conglomerates. Using data from 2017 to 2021 of individual financial institutions and conglomerates operating in Brazil and parameters estimated by previous studies, we simulate the impact of that regulation on financial conglomerates. We find that an interchange fee
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The green effects of competition: administrative monopoly regulation and green innovation Finance Research Letters (IF 10.4) Pub Date : 2024-05-06 Zhaohui Zhu, Yang Huang, Chao Hu, Youliang Yan
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The Coholding Puzzle: New Evidence from Transaction-Level Data Rev. Financ. Stud. (IF 8.414) Pub Date : 2024-05-06 John Gathergood, Arna Olafsson
Why do individuals pay debt interest when they could use their savings to pay down the debt? We explore why individuals “cohold” debt and savings using detailed and highly disaggregated daily-level data on household finances. We find that coholding mostly occurs in short spells within the month and the level of coholding is typically modest. Periods of coholding are not associated with shocks at the
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CSR in the banking industry: A longitudinal analysis of the impact on financial performance and risk-taking Finance Research Letters (IF 10.4) Pub Date : 2024-05-04 A. Hojer, V. Mataigne
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The Effects of Mandatory ESG Disclosure Around the World Journal of Accounting Research (IF 4.446) Pub Date : 2024-05-04 PHILIPP KRUEGER, ZACHARIAS SAUTNER, DRAGON YONGJUN TANG, RUI ZHONG
We compile a novel data set on mandatory environmental, social, and governance (ESG) disclosure around the world to analyze the stock liquidity effects of such disclosure mandates. We document a positive effect of ESG disclosure mandates on firm‐level stock liquidity. The effects are strongest if the disclosure requirements are implemented by government institutions, not on a comply‐or‐explain basis
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Are fiscal rules efficient on public debt restraint in the presence of shadow economy? Finance Research Letters (IF 10.4) Pub Date : 2024-05-03 Eugenia Ramona Mara, Raluca Maran
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BigTech, FinTech, and banks: A tangle or unity? Finance Research Letters (IF 10.4) Pub Date : 2024-05-03 Sitara Karim, Brian M. Lucey
We examined the dual impact of BigTech and FinTech financing on traditional banking metrics like personal loans, credit risk, and bank performance. Through baseline regressions, alternative measures, endogeneity checks, and sub-sample analysis, our findings reveal an inverse relationship between BigTech and FinTech financing with personal loans and credit risk, suggesting severe challenges to traditional
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Firm systematic risk after the Russia–Ukraine invasion Finance Research Letters (IF 10.4) Pub Date : 2024-05-03 Stefano Piserà, Laura Chiaramonte, Andrea Paltrinieri, Flavio Pichler
We explore the systematic risk effects of the Russia–Ukraine war on European non-financial firms during the period 2021Q1–2022Q4. Using quarterly firm-level data, we find that, after the Russia–Ukraine conflict, European non-financial firms experienced a statistically significant increase of systematic risk (Beta). Moreover, we also find that firms with higher foreign sales reduced their exposure to
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Analysts’ recommendations on peer-relative comparable sustainability disclosure Finance Research Letters (IF 10.4) Pub Date : 2024-05-03 Jamal A. Nazari, Ehsan Poursoleyman
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Big data analytics and environmental performance: The moderating role of internationalization Finance Research Letters (IF 10.4) Pub Date : 2024-05-03 Hai Le, Kim-Chi Vu
This study investigates the influence of big data analytics on environmental performance in the context of US Fortune 500 listed internationalizing companies from 2010 to 2021. Grounded in organizational learning theory, our results highlight BDA's positive impact, enabling firms to adapt and enhance environmental practices through
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Social networks and start-up funding Finance Research Letters (IF 10.4) Pub Date : 2024-05-03 Alex Annan Abakah, Gunchang Kim, Hyacinthe Yirlier Somé
This paper examines whether aggregate social networks influence start-up firms’ access to external funding. We find that start-ups in U.S. counties with higher social proximity to start-up funding (SPF) attract a larger investor base and secure more capital. The results are robust to several alternate specifications. We also show that start-ups in counties with higher SPF have high survival rates and
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A (Sub)penny for Your Thoughts: Tracking Retail Investor Activity in TAQ J. Financ. (IF 7.915) Pub Date : 2024-05-03 BRAD M. BARBER, XING HUANG, PHILIPPE JORION, TERRANCE ODEAN, CHRISTOPHER SCHWARZ
We placed 85,000 retail trades in six retail brokerage accounts from December 2021 to June 2022 to validate the Boehmer et al. algorithm, which uses subpenny trade prices to identify and sign retail trades. The algorithm identifies 35% of our trades as retail, incorrectly signs 28% of identified trades, and yields uninformative order imbalance measures for 30% of stocks. We modify the algorithm by
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Digitalization and Retirement Contribution Behavior: Evidence from Administrative Data Rev. Financ. Stud. (IF 8.414) Pub Date : 2024-05-02 Claudio Daminato, Massimo Filippini, Fabio Haufler
Retirement savings decisions are increasingly mediated by digital technologies that promise to help individuals plan adequately for their retirement. We exploit a natural experiment to show that introducing a digital pension application increases the probability of making a voluntary retirement contribution by 1.8 percentage points, from an average pretreatment contribution rate of 2.8%. Men and higher-income
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Financial inclusion, economic development, and inequality: Evidence from Brazil J. Financ. Econ. (IF 8.238) Pub Date : 2024-05-02 Julia Fonseca, Adrien Matray
We study a financial inclusion policy targeting Brazilian cities with low bank branch coverage using data on the universe of employees from 2000–2014. The policy leads to bank entry and to similar increases in both deposits and lending. It also fosters entrepreneurship, employment, and wage growth, especially for cities initially in banking deserts. These gains are not shared equally and instead increase
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Relative Performance Evaluation and Strategic Peer-Harming Disclosures Journal of Accounting Research (IF 4.446) Pub Date : 2024-05-02 MATTHEW J. BLOOMFIELD, MIRKO S. HEINLE, OSCAR TIMMERMANS
Many firms use relative stock performance to evaluate and incentivize their CEOs. We document that such firms routinely disclose information that harms their peers' stock prices, and sometimes explicitly mention the harmed peers, by name, in these disclosures. Consistent with deliberate sabotage, peer-harming disclosures appear to be aimed at peers whose stock price depressions are most likely to benefit
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The Capital Market Effects of Centralizing Regulated Financial Information Journal of Accounting Research (IF 4.446) Pub Date : 2024-04-30 GURPAL SRAN, MARCEL TUIJN, LAUREN VOLLON
We study the capital market effects of information centralization by exploiting the staggered implementation of digital storage and access platforms for regulated financial information (Officially Appointed Mechanisms, or OAMs) in the European Union. We find that the implementation of OAMs results in significant improvements in capital market liquidity, consistent with the notion that OAMs lower investors'
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Blood Money: Selling Plasma to Avoid High-Interest Loans Rev. Financ. Stud. (IF 8.414) Pub Date : 2024-04-29 John M Dooley, Emily A Gallagher
Little is known about the motivations and outcomes of sellers in remunerated markets for human materials. We exploit dramatic growth in the U.S. blood plasma industry to shed light on the sellers of plasma. Sellers tend to be young and liquidity-constrained with low incomes and limited access to traditional credit. Plasma centers absorb demand for nontraditional credit. After a plasma center opens
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Ambiguity and private investors’ behavior after forced fund liquidations J. Financ. Econ. (IF 8.238) Pub Date : 2024-04-29 Steffen Meyer, Charline Uhr
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Spending Less after (Seemingly) Bad News J. Financ. (IF 7.915) Pub Date : 2024-04-29 MARK J. GARMAISE, YARON LEVI, HANNO LUSTIG
Using high‐frequency spending data, we show that household consumption displays excess sensitivity to salient macroeconomic news, even when the news is not real. When the announced local unemployment rate reaches a 12‐month maximum, local news coverage of unemployment increases and local consumers reduce their discretionary spending by 1.5% relative to consumers in areas with the same macroeconomic
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Financial fusion: Bridging Islamic and Green investments in the European stock market International Review of Financial Analysis (IF 8.235) Pub Date : 2024-04-28 Afzol Husain, Sitara Karim, Ahmet Sensoy
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Asset allocation combining macro and micro information–Empirical test based on entropy pool model Finance Research Letters (IF 10.4) Pub Date : 2024-04-27 Tianyuan Li, Ping Chen
Macroeconomic environment is an essential factor affecting asset return, but it is difficult to construct portfolios using macro information quantitatively in traditional models. In this paper, we extend the Black-Litterman framework to build an efficient portfolio by using views containing macro information and prior market distribution reflecting micro information. In order to enhance the model's
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Female CEOs with a squeeze of narcissism: A perfect cocktail for corporate performance? Finance Research Letters (IF 10.4) Pub Date : 2024-04-27 Tom Aabo, Sara Korsdal Rønnow
Narcissism is prevalent in the upper echelons, and CEO narcissism has been shown to affect corporate outcomes (although not corporate performance in a significant and robust way). We argue that narcissism may be performance enhancing in the context of female CEOs because female CEOs are unique – based on both nurture (i.e., the double bind) and nature (i.e., evolutionary traits) – in being able to
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Blockchain technology and internal control effectiveness Finance Research Letters (IF 10.4) Pub Date : 2024-04-27 Wentao Ma, Wanyun Li
This paper examines the effectiveness of the internal control mechanisms of blockchain-as-a-service (BaaS) providers. Given the lack of classification in the blockchain industry, we conduct text mining of official filings to identify BaaS providers and compare their internal control issues with those of matched firms in other industries. Our findings, which offer pivotal insights for policymakers and
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Do sanctions trigger financial crises? Finance Research Letters (IF 10.4) Pub Date : 2024-04-26 Maria Shchepeleva, Mikhail Stolbov, Laurent Weill
We investigate the effect of sanctions on the occurrence of financial crises. We use the Classification and Regression Tree (CART) algorithm to check whether binary classification mechanism selects sanctions as a predictive factor for the different types of financial crises. We find that trade sanctions matter for the increased probability of banking crises, while military sanctions are associated
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Gradual information diffusion across commonly owned firms J. Financ. Econ. (IF 8.238) Pub Date : 2024-04-26 Jie Ying
This paper studies how common institutional ownership (CIO) affects information diffusion in the stock market. My findings suggest that CIO can exacerbate the slow spread of information across firms. With over 50% of institutional investors holding concentrated stock portfolios, I infer a fundamental connection among firms with CIO. These firms exhibit cross-predictability in monthly stock returns
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Bridging Theory and Empirical Research in Accounting Journal of Accounting Research (IF 4.446) Pub Date : 2024-04-26 MATTHIAS BREUER, EVA LABRO, HARESH SAPRA, ANASTASIA A. ZAKOLYUKINA
Formal theory and empirical research are complementary in building and advancing the body of knowledge in accounting in order to understand real-world phenomena. We offer thoughts on opportunities for empiricists and theorists to collaborate, build on each other's work, and iterate over models and data to make progress. For empiricists, we see room for more descriptive work, more experimental work
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Diversity Washing Journal of Accounting Research (IF 4.446) Pub Date : 2024-04-26 ANDREW C. BAKER, DAVID F. LARCKER, CHARLES G. McCLURE, DURGESH SARAPH, EDWARD M. WATTS
We provide large‐sample evidence on whether U.S. publicly traded corporations use voluntary disclosures about their commitments to employee diversity opportunistically. We document significant discrepancies between companies' external stances on diversity, equity, and inclusion (DEI) and their hiring practices. Firms that discuss DEI excessively relative to their actual employee gender and racial diversity
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Time-frequency extreme risk spillovers between COVID-19 news-based panic sentiment and stock market volatility in the multi-layer network: Evidence from the RCEP countries International Review of Financial Analysis (IF 8.235) Pub Date : 2024-04-25 Yanshuang Li, Yujie Shi, Yongdong Shi, Xiong Xiong, Shangkun Yi
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Assessing resilience to systemic risks across interbank credit networks using linkage-leverage analysis: Evidence from Japan International Review of Financial Analysis (IF 8.235) Pub Date : 2024-04-25 Haibo Wang
The banking crisis started in March 2023 was triggered by disproportion of deposit liability and assets. Applying balance sheets from 1999 to 2022, from the Japanese Bank Association, this study scrutinizes the durability of high-priority banking systems against damaging events in that industry. Eyeing the unique high-level savings in Japanese banking, this study investigates the impact of disproportion
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Impression management strategy — The relationship between accounting narrative thematic bias and financial graph distortion The British Accounting Review (IF 4.761) Pub Date : 2024-04-25 Jeff Boone, Jie Hao, Cheryl Linthicum, Viet Pham
Prior literature has examined 10-K narrative thematic bias and financial graph distortion as two independent outcomes that might arise from managements' efforts at impression management. Largely unexplored is an analysis of narrative thematic bias and financial graph distortion as joint and interrelated outcomes that would arise if management coordinates both in the same 10-K report as part of an impression
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Innovation and Financial Disclosure Journal of Accounting Research (IF 4.446) Pub Date : 2024-04-25 HUI CHEN, PIERRE JINGHONG LIANG, EVGENY PETROV
We examine how financial disclosure policy affects a firm manager's strategy to innovate within a two-period bandit problem featuring two production methods: an old method with a known probability of success, and a new method with an unknown probability. Exploring the new method in the first period provides the manager with decision-useful information for the second period, thus creating a real option
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Decoding financial performance of US-listed entities: A sectoral exploration of input efficiency amid stochastic volatility Finance Research Letters (IF 10.4) Pub Date : 2024-04-24 Antony Andrews, Nikeel Nishkar Kumar
This study explores the complex relationship between firm efficiency and stochastic volatility, focusing on how firms utilise inputs to generate sales and the impact of financial shocks on efficiency levels. Utilising a dataset of 476 U.S. firms across 23 sectors from 2010 to 2022, it integrates stochastic volatility into efficiency analysis, treating volatility as an evolving, unobserved process diverging
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The impact of the capital gains tax on the Korean derivatives market Finance Research Letters (IF 10.4) Pub Date : 2024-04-24 Gunther Capelle-Blancard, Emna Khemakhem
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Uncertainty and cryptocurrency returns: A lesson from turbulent times International Review of Financial Analysis (IF 8.235) Pub Date : 2024-04-24 Barbara Będowska-Sójka, Joanna Górka, Danial Hemmings, Adam Zaremba
This paper explores the interplay between economic uncertainty and cryptocurrency behaviour. Using data spanning from April 2018 to December 2022, we examine the relationship between ten major cryptocurrencies and a repertoire of uncertainty measures covering geopolitical events, economic policy, and commodity, equity, and bond markets. Cryptocurrency returns exhibit dynamic and positive correlation
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Environmental regulations and corporate cash holdings The British Accounting Review (IF 4.761) Pub Date : 2024-04-24 Wenrui Chen, Yue Cao, Yizhe Dong, Diandian Ma
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Analysis of the impact of managers' psychological deviation on information disclosure and irrational overseas investment after IFRS convergence Finance Research Letters (IF 10.4) Pub Date : 2024-04-23 Bin Zhong, Wei Ni Soh, Tze San Ong, Haslinah Muhamad, ChunXi He
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The effect of ex ante litigation risk on corporate fraud: Evidence from securities class action act in Korea Finance Research Letters (IF 10.4) Pub Date : 2024-04-23 Seungho Choi, Yong Kyu Gam, Yong Hyuck Kim, Hojong Shin
Using the phased adoption of the Securities Class Action (SCA) Act in South Korea as a quasi-exogenous event escalating ex ante litigation risks for Korean firms, we explore the effect of heightened litigation risks on firms’ involvement in fraudulent activities. We find that, following the implementation of the SCA Act, companies affected by the new legislation are more likely to reduce instances
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Unmasking the carbon conundrum: How emissions impact stock price crash risk Finance Research Letters (IF 10.4) Pub Date : 2024-04-23 Vuong Thao Tran, Dinh Hoang Bach Phan, Chwee-Ming Tee, Dat Thanh Nguyen
This study examines the influence of carbon risk on stock price crash risk. Using a comprehensive dataset of 3,417 US companies from 2006 to 2021, we provide evidence that carbon risk is significantly linked to a higher crash risk for firms. Moreover, our findings suggest that this positive association is more pronounced during the Democratic presidency and to companies operating in carbon-intensive
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Managing Mental Accounts: Payment Cards and Consumption Expenditures Rev. Financ. Stud. (IF 8.414) Pub Date : 2024-04-22 Michael Gelman, Nikolai Roussanov
Does mental accounting matter for total consumption expenditures? We exploit a unique setting in which individuals exogenously receive a new payment card, without requesting one. Using random variation in the time of receipt, we show that individuals temporarily increase total consumption expenditure by making purchases with the new card without reducing spending on the others. We do not observe a
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Is Long‐Run Risk Really Priced? Revisiting Liu and Matthies (2022) J. Financ. (IF 7.915) Pub Date : 2024-04-22 PAULO MAIO
The claim by Liu and Matthies (LM) that their macro news risk factor (NI) prices 51 portfolios (associated with four different portfolio groups) is not appropriate. In fact, their single‐factor model is successful only in explaining the momentum deciles, while producing strongly negative performance for the remaining groups. The pricing performance is more doubtful in the case of the alternative news
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Revisiting seasonality in cryptocurrencies Finance Research Letters (IF 10.4) Pub Date : 2024-04-21 Lukas Mueller
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Can ChatGPT improve investment decisions? From a portfolio management perspective Finance Research Letters (IF 10.4) Pub Date : 2024-04-21 Hyungjin Ko, Jaewook Lee
We examine ChatGPT, a prominent Large Language Model (LLM), in supporting portfolio management with a focus on asset selection and diversification through quantitative methods. We use ChatGPT to select assets from various asset classes and evaluate the diversification effect of its selections. Our results suggest that ChatGPT’s selections are statistically significantly better in diversity index than
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Can asymmetry, long memory, and current return information improve crude oil volatility prediction? ——Evidence from ASHARV-MIDAS model Finance Research Letters (IF 10.4) Pub Date : 2024-04-21 Zhenlong Chen, Junjie Liu, Xiaozhen Hao
We propose an ASHARV-MIDAS model that incorporates the asymmetric and long-memory characteristics of financial asset returns, while integrating current return information into the volatility equation to enhance prediction accuracy. Additionally, we derive the lag order expression and conditional variance of short-term volatility in the novel model to analyze its distinction from the classical GARCH-MIDAS
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When acquirers are short on cash flow in M&A deals International Review of Financial Analysis (IF 8.235) Pub Date : 2024-04-21 Yaru Ren, Lin Li, Wilson H.S. Tong, Peter Lam
Studies on corporate takeovers are voluminous but typically assume that acquirers are not financially constrained. We show that acquirers' free cash flow (FCF) levels have significant impacts on their takeover activities and consequences. Acquirers with low FCF, despite their high levels of cash holdings, tend to pay in stocks rather than cash. The targets acquired by low-FCF acquirers are of inferior
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Is gold always a safe haven? Finance Research Letters (IF 10.4) Pub Date : 2024-04-20 Michael Ryan, Shaen Corbet, Les Oxley
This study reexamines the long-held view of gold as a universal safe haven during stock market downturns. Utilising a dataset from 1979 to 2020, we investigate the conditional nature of gold’s safe-haven status with the S&P 500 index, revealing that the specific drivers of market declines determine the extent of gold’s safe-haven status. Notably, gold’s protective efficacy is pronounced during downturns
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Geopolitical risk and the dynamics of REITs returns Finance Research Letters (IF 10.4) Pub Date : 2024-04-20 Alain Coën, Aurélie Desfleurs
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Machine-learning stock market volatility: Predictability, drivers, and economic value International Review of Financial Analysis (IF 8.235) Pub Date : 2024-04-20 Juan D. Díaz, Erwin Hansen, Gabriel Cabrera
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Stock market prices and Dividends in the US: Bubbles or Long-run equilibria relationships? International Review of Financial Analysis (IF 8.235) Pub Date : 2024-04-20 Robinson Dettoni, Luis A. Gil-Alana, OlaOluwa S. Yaya
This paper presents a novel approach to identifying potential bubbles in the US stock market by employing alternative time series methods based on long memory, including fractional integration and cointegration, as well as duration dependence non-parametric models. To test for duration dependence, the paper employs a unique non-parametric hazard function estimation method, using monotonic P-splines
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The shape of the Treasury yield curve and commodity prices International Review of Financial Analysis (IF 8.235) Pub Date : 2024-04-20 Yasmeen Bayaa, Mahmoud Qadan
We decompose the U.S. yield curve into three latent factors – the level, slope and curvature – and explore the information content of the yield curve regarding the future evolution in oil, coal, copper, ethanol, gold, heating oil, natural gas, palladium, platinum, silver and zinc prices. Using data from January 1986 to November 2021, we find that the shape of the term structure is very informative
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Key audit matters disclosures and informed traders The British Accounting Review (IF 4.761) Pub Date : 2024-04-20 Zabihollah Rezaee, Saeid Homayoun
We examine whether the audit regulation of disclosing key audit matters (KAM) provides value-relevant information to short sellers as informed investors. The theoretical underpinning for examining short sellers' ability and incentives to use KAM disclosures in their stock valuation implications is based on a prediction theory and a skilled information processing theory of short sellers. Using a sample
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Effects of incomplete information on risk management Finance Research Letters (IF 10.4) Pub Date : 2024-04-19 Hwa-Sung Kim
Recent research shows that while the creditors’ interests determine an issuer’s hedging policy, creditors observe incomplete information regarding the cash flow. This study examines hedging effects with incomplete information through a real-option model, thereby deriving associated implications. We show that the difference in firm values between hedged and unhedged policies increases with more incomplete
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Rent or Buy? Inflation Experiences and Homeownership within and across Countries J. Financ. (IF 7.915) Pub Date : 2024-04-19 ULRIKE MALMENDIER, ALEXANDRA STEINY WELLSJO
We show that past inflation experiences strongly predict homeownership within and across countries. First, we collect novel survey data, which reveal inflation protection to be a key motivation for homeownership, especially after high inflation experiences. Second, using household data from 22 European countries, we find that higher exposure to historical inflation predicts higher homeownership rates
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Digital money creation and algorithmic stablecoin run Finance Research Letters (IF 10.4) Pub Date : 2024-04-18 Kanis Saengchote, Krislert Samphantharak
This study examines the downfall of Iron Finance's algorithmic stablecoin in June 2021 and draws parallels with the Terra–Luna (UST) collapse in May 2022. Using transaction-level blockchain data, we dissect the events leading to Iron Finance's failure, unveiling algorithmic stablecoins’ inherent vulnerabilities. We highlight the disproportionate impact on retail investors, a pattern also mirrored in