Ranadeb Chaudhuri, Zoran Ivkovich, and Andrei Simonov ♦ This paper studies the relation between individuals’ equity investment and birth order. Earlier-born siblings are more likely to participate in equity markets than later-born siblings are. Participating earlier-born siblings carry less portfolio…
N Aaron Pancost and Garrett Schaller ♦ Instrumental variable (IV) estimates are typically much larger than their ordinary least squares (OLS) counterparts, often suggesting implausible values of the omitted variable bias. We derive a meta-regression of OLS on IV estimates…
Harry DeAngelo and Jonathan M. Karpoff ♦ Despite cosmetic similarities, the Modigliani-Miller and Coase Theorems provide conceptually distinct insights for analysis of corporate financial policy and governance that are driven by different economic considerations, with neither theorem a special case of…
Michele Fioretti, Victor Saint-Jean, and Simon C. Smith ♦ This paper studies how the timing of NGO activism shapes its effectiveness in influencing corporate behavior. Using data on 2,350 campaigns targeting U.S. firms, we show that campaigns timed at annual…
Andrea Gamba and Alessio Saretto ♦ We show that a structural model incorporating firms’ real options and financial leverage decisions can generate forward-looking equity distributions of various shapes, resulting in highly flexible implied volatility surfaces. In contrast, exogenously specified models…
Yanyan Lin, Chongfeng Wu, Guofu Zhou, and Shunwei Zhu ♦ We introduce a novel decomposition of stock market returns into a permanent component (PC), capturing long-term growth, and a temporary component (TC), reflecting short-term fluctuations. The decomposition is explicit, straightforward…
