Tag Archives: Economics

Millennials and GenZ’ers Have Only One Lifetime to Change the World with Their Investments

By | September 23, 2022

Millennials and GenZ’ers are perceived to have a reckless mentality and adopt a careless attitude toward life decisions, including investing. The reality, however, is that Millennials and GenZ’ers recognize they only live once and they want to make an impact in the lives that they live. They are committed to creating powerful and positive changes… Read More »

The Role of Employees as Information Intermediaries: Evidence From Their Professional Connections

By | September 14, 2022

Information intermediaries provide or transmit useful information to other parties in the capital market, either because (i) it has not been publicly released, or (ii) it has not been widely disseminated. Therefore, information intermediaries influence a firm’s information environment. For example, institutional investors and analysts help incorporate more earnings-related information into prices during the pre-announcement… Read More »

Blockholder and CEO Wealth-Performance Sensitivity

By | September 12, 2022

Firm owners do not run the firm. Instead, they delegate the job to managers with expertise. Such delegation inevitably gives rise to the misalignment of interests between the firm owners and managers, as the latter do not share the benefits of the firm’s success as much. Shareholders, who are the firm owners, thus need to… Read More »

Corporate Directors Learn from Environmental Shareholder Engagements

By | September 8, 2022

Institutional investors are increasingly worried about their portfolios’ exposure to environmental risks. For example, heat waves cause a decrease in worker productivity, resulting in lower revenues and operating income, and the regulation of externalities, such as carbon pricing, affects the value of polluting firms. A global survey indicates institutional investors believe environmental risks have financial… Read More »

Impact of Ownership Patterns on Outer Space Regulations 

By | September 7, 2022

The space industry is undergoing a rapid transition. This is mostly because the traditional objectives, especially observatory space missions, have given way to more commercialised exploratory goals. Recently, in addition to the significant increase in the number of private satellites orbiting earth (around 11,000), new exploratory attempts in space have included mineral mining, space tourism… Read More »

How does ETF redemption work, and what are economic impacts? 

By | September 6, 2022

Corporate bond exchange-traded funds (ETFs) have been increasing rapidly and becoming an emerging financial instrument in the past two decades. They allow investors to build low-cost bond portfolios. Investors can adjust positions in real-time instead of trading corporate bonds over the counter or investing in bond mutual funds with minimums and limits. With ETFs targeting… Read More »

How Does Deleveraging Affect Funding Market Liquidity?

By | August 31, 2022

Financial institutions are highly leveraged due to the extremely low interest rates of the past decade. However, interest rates are now rising worldwide due to inflationary pressures, which can lead to plunging stock markets and significant deleveraging of financial institutions. Policymakers, academics, and practitioners are concerned about the impact of deleveraging. In our recent paper,… Read More »

Good Peers, Good Apples? Peer Effects in Portfolio Quality 

By | August 22, 2022

Do friends provide good financial advice that helps inexperienced investors earn a higher return in the market? Or do friends provide bad advice that leads to excessive investments in individual stocks and asset bubbles? In a new study, we provide evidence that new investors copy the portfolios of their friends and that the advice was,… Read More »

Climate-Related Uncertainty and Managerial Short-Termism

By | August 12, 2022

In a new study, we examine whether climate-related uncertainty leads to increased managerial short-termism. “Climate-related uncertainty” refers to managers’ inability to predict the scale and costs of climate change on their firm’s operating environment. Managers, policy makers, and institutional investors have all expressed increased concern about climate-related uncertainty, especially uncertainty stemming from exposure to natural… Read More »

Cryptocurrency Disruption and Investor Reaction to Earnings Announcements 

By | July 29, 2022

Does the increasing attention to cryptocurrencies divert investor attention away from the traditional equity market? In our recent paper, we study whether attention to cryptocurrency impacts information processing and price efficiency in the equity market.   The cryptocurrency market has grown from $17 billion at the beginning of 2017 to $2.2 trillion at the end of… Read More »