Francesca Zucchi ♦ I develop a model revealing the interplay between a stock’s liquidity and the policies and value of the issuing firm. The model shows that bid-ask spreads increase not only the firm’s cost of capital but also the…
Yifei Zhang ♦ This study examines whether and how corporate venture capital (CVC) spurs changes in firm scope. Using two sets of text-based metrics about firm scope, I document that CVC investments are strongly associated with subsequent firm scope changes…
Karolis Liaudinskas ♦ This paper proposes a novel way to estimate consumer switching costs and uses Lithuanian credit register data and two bank closures to provide this estimate for the loan market. I show that when a distressed bank’s closure…
Harry Mamaysky ♦ The onset COVID-19 was characterized by voluminous, negative news. Higher narrativity news topics—measured by textual proximity to articles describing the 1987 stock market crash and textual distance from Federal Reserve communications—were systematically associated with contemporaneous market responses,…
Marco Elia ♦ I show that hedge funds react to unrealized losses on their passive positions by engaging with the management. The hedge fund managers’ psychological response is consistent with cognitive dissonance: they blame the firms’ management and switch to…
Ahmed Elnahas, Lei Gao, Md Noman Hossain, and Jeong-Bon Kim ♦ This study investigates whether the management earnings forecasts of Republican and Democratic CEOs differ due to systematic differences in their information disclosure preferences. We find that Republican CEOs prefer…
