Kyoo il Kim, Suyong Song, and Jiawei (Brooke) Wang ♦ We study the classical relationship between a firm’s investment and Tobin’s q, for which an unobserved persistent shock is an important factor of investment decision. In our setting, besides the…
Nils Lohmeier and Hannes Mohrschladt ♦ We propose and test a catering theory of earnings guidance. As predicted by our model, managers cater to reference point dependent investor preferences by issuing excessively optimistic earnings forecasts if their investors have experienced…
Leming Lin ♦ This paper studies the flow of payout funds in the financial system. Using various data sources and empirical strategies, it provides evidence that a significant portion of payouts enters the banking sector as deposits, which are then…
Amit Goyal, Narasimhan Jegadeesh, and Yanbin Wu ♦ The closing auction crosses about 10% of daily trades and serves as a potentially attractive alternative to trading in the continuous market. We estimate the price impact for order execution in the…
Vidhi Chhaochharia, Alok Kumar, Mehrshad Motahari, and Ville Rantala ♦ We study the aggregate impact of information spillovers emerging from industry star firms. Changes in stars’ relative earnings growth predict future earnings growth, consensus earnings surprises, and job postings of…
Geng Niu, Xuefeng Xiang, Liuming Yang, and Yang Zhou ♦ Housing and human capital represent two major forms of household wealth. This paper investigates the potential for housing speculation to crowd out household investment in children’s education, an endeavor that…
