Zhihui Gu, Hao Liang, and Hanyu Zhang ♦ We examine how Confucian culture operates as an informal institution by fostering relational contracts that substitute for formal legal frameworks in shaping corporate behavior. Using data on historical Confucian academies near firms’…
Brad Cannon and Hannes Mohrschladt ♦ Retail investor contrarian selling depends on whether a position is at a gain or loss. Selling propensity increases in daily returns for positions with unrealized gains (contrarian selling) and decreases in returns for loss…
Claus Munk ♦ Applying a rich model of individuals’ life-cycle utility maximization, we comprehensively evaluate retirement saving plans. Across a range of individual characteristics, access to basic plans with constant expected payouts and no or full annuitization leads to individual utility…
Guanglian Hu and Kris Jacobs ♦ Expected returns on market volatility, which can be obtained from VIX futures prices in closed form using standard models, positively predict subsequent realized volatility returns. Volatility returns are negative on average. Following increases in…
Kevin Aretz, Shuwen Yang, and Yafei Zhang ♦ We argue that firms’ ability to disinvest real assets helps rationalize the negative distress premiums in stocks, bonds, and, as we show, loans and firm assets. Using a real-options model in which…
Jaewoo Kim, Seyoung Park, and Ryan Wilson ♦ Using the Credit Rating Agency Reform Act of 2006, we examine the effect of the credibility of mandatory disclosure by credit rating agencies (CRAs) on market feedback. We find an increase in…
