FINANCIAL REVIEW最新文献

Utilizing a national individual-level medical dataset and the home bias phenomenon in investment, our study shows a strong and robust link between declines in local stock returns and increased antidepressant consumption among investors. This effect intensifies in areas with higher per capita dividend income, suggesting a direct relationship between higher stock ownership and stronger responses. We confirm that portfolio losses, not local economic conditions, are responsible for increased antidepressant usage during market downturns. Using the frequency of psychotherapy sessions yields similar findings. Moreover, our study supports the loss aversion hypothesis as we find positive stock returns do not influence antidepressant usage.

This study examines whether firms led by founder-CEOs are significantly different from firms led by nonfounder-CEOs in terms of the nature of their risk. Our results show that founder-led firms are associated with higher operational but lower financial risk. We find that the differential nature of risk-taking in founder-CEO firms is driven by CEO's influence, their propensity of removal, and the probability of bankruptcy of the firm. While CEO-chair duality and the sensitivity of founder-CEO firm's probable bankruptcy play significant roles in determining the level of financial risk, the sensitivity of founder-CEOs to forced turnover leads to higher operational risk.

This paper proposes the use of social media as a proxy for financial information. Using an extended sample of 53,580,759 tweets and employing text analysis tools (Latent Dirichlet Allocation and Term Frequency–Inverse Document Frequency), we determine the information being exchanged on any given day. We train machine-learning classifiers and forecast crypto price movements for more than 8000 cryptocurrencies and gauge market efficiency through successful forecasts based on public information. We propose various metrics of market efficiency for cryptocurrency assets and demonstrate that market efficiency is higher during the first 6 months after the Initial Coin Offering. We also examine the efficiency behavior of individual currencies during crisis periods.

Using exogenous changes in the personal bankruptcy treatment of student loans as well as the level of student debt, we find that student debt has a negative effect on household retirement savings. This negative relation is present for younger and older individuals, and is larger for the latter group, indicating lower levels of retirement savings for precisely those who can least afford it. We also find that student debt is related to greater borrowing on retirement plans. Households with more student debt expect to have insufficient retirement income and are less able to plan financially for the long term.

This paper develops and empirically tests a new version of the trade-off theory of corporate capital structure choices that accounts for CEOs' biased beliefs, with a focus on overcaution. We characterize the bias as a distortion of expected rates of return on equity and debt that, for Overcautious CEOs, are overestimated compared to a rational CEO. The theory shows that if CEOs have higher bias in equity, than in debt-value estimation, overcautious CEOs will choose lower levels of debt compared to rational CEOs, and, if the degree of overcaution is sufficiently high, they will adopt a zero-leverage policy.

This study examines the impact of employment background on the objectivity of profitability forecasts in the financial sector. We find that investment bank analysts provide relatively biased recommendations and less accurate forecasts than their counterparts at independent research firms (IRFs). The performance discrepancy is greater for bulge bracket banks and for firms involved in syndication with the analysts' employers. A closer look at analysts transitioning between IRFs and investment banks reveals that these biases stem from their affiliation with investment banks rather than personal bias. Our findings emphasize the critical influence of the work environment on analyst behavior.

This paper investigates the impact of discrimination publicity on employee opinion. The findings suggest that employees reduce their sentiments toward the firm and its leaders when discrimination becomes public via Equal Employment Opportunity Commission (EEOC) announcements. Following the stakeholder theory of capital structure, the effect clusters in firms with above-average leverage. Additionally, discrimination announcements increase accruals and the E index, reinforcing a culture of negative management at the firm. These results suggest that human capital risk plays a vital role in employee reactions to discrimination announcements.

The asset pricing Literature suggests market sentiment is a state variable. This study shows that market sentiment is positively priced at the cross-section of stock returns, conditional on aggregate investors’ sentiment. We estimate individual stock sentiment beta and find that, following low-sentiment periods, stocks in the highest sentiment beta quintile generate a 0.74% higher monthly return than stocks in the lowest sentiment beta quintile. However, this return spread is insignificant following medium- or high-sentiment periods. This finding is consistent with the argument that overpricing following high-sentiment periods is more prevalent than underpricing following low-sentiment periods due to short-sale constraints.

Following the Fukushima Daiichi nuclear disaster, utilities firms increase their commitments to corporate social responsibility (CSR), emphasizing on addressing environmental concerns over non-environmental ones. The intensified focus on CSR is especially significant in utilities firms with substantial institutional ownerships. Concurrent to the increase in CSR, utilities firms also exhibit a decline in advertising expenditures, a trend more pronounced in firms facing more financial constraints. Our findings suggest that utilities firms substitute CSR for advertising following the Fukushima accident. This shift appears driven by investors’ heightened focus on environmental issues in the aftermath of the accident.

Academic research should strive to increase our understanding of the world we live in, and as such open the door for improvements in this world. With this goal in mind, this piece represents a call for academics to jointly consider their research agenda and the audience for this research. This audience might include people working in industry or policy makers. Closer connections between academia and broader audiences contribute to research that informs debates on the salient issues of today, higher quality studies on these issues, and greater impact. To provide insight on the relation between academic research and the most salient current issues, I compare topics of focus within academic journals with topics of focus in industry articles and regulatory publications. I identify gaps and suggest areas for future research.