A MACRO-LEVEL INVESTIGATION OF TRANSATLANTIC CONTROLLING SHAREHOLDER’S FIDUCIARY DUTY

Legal systems around the world apply various strategies to mitigate agency costs between controlling and minority shareholders. In my recent paper, I provide a systematic review of the transnational law on controlling shareholder’s loyalty and care obligations by exploring the cultural, historical, and socio-economic backgrounds embodied in different doctrinal choices. A. Doctrinal Strategies for Regulating Controlling […]

Democracy and the Pricing of Initial Public Offerings Around the World

The proliferation of democracy internationally has spurred a large volume of research on its benefits (and costs) over economic growth in recent decades. Some studies assess the impact of democracy over various aspects of macroeconomic growth; however, the same cannot be argued for the micro level, whereby the effect of democracy over corporate decisions has been largely ignored.  To the extent that macroeconomic activity reflects the […]

The Initial and Subsequent Credit Rating Effects of Acquisitions

The financial system has developed several mechanisms to align interests of managers and investors. Our study focuses on one such mechanism—credit rating agencies. The financial crisis of 2008 highlighted the importance of well-functioning credit rating agencies. The failure of credit rating agencies during the crisis was a focus of the Dodd-Frank Act of 2010 (“Dodd-Frank”), […]

How is the Audit Market Affected by Characteristics of the Non-Audit Services Market

Researchers, regulators, and practitioners have long-standing concerns about the negative effects of non-audit services (NAS) on audit quality. On the one hand, payments for NAS by client firms can impair auditor independence and motivate auditors to ignore client deficiencies. On the other hand, knowledge transfer across audit and NAS employees at the same firm can […]

The Information Role of the Media in Earnings News

A central question about the media’s role in capital markets is whether media coverage influences investors’ reactions to firms’ disclosures, such as earnings releases. Multiple studies provide evidence consistent with the media disseminating, but not creating, information that influences the market’s earnings response. Specifically, they find that brief articles without, but not lengthier articles with, […]

Hedge Fund Trading and Funding During the March 2020 US Treasury Market Dislocation

The role of hedge funds in U.S. Treasury (UST) markets is thought to have increased in importance since the global financial crisis (GFC) as bank-affiliated broker-dealers ceded some of their traditional activities in UST market arbitrage and liquidity provision to non-bank financial institutions. While UST securities play a vital role in the global financial system, […]

Comprehensive Study of Special-Purpose Acquisition Company (SPAC): An Investment Perspective

Introduction Special-Purpose Acquisition Companies (SPACs) have been widely discussed over the past year. According to the U.S. Securities and Exchange Commission (SEC), a SPAC is created specifically to pool funds in order to finance a merger or acquisition opportunity within a set time frame. A SPAC has 24 months after the initial public offering (IPO) […]

INSIDER TRADING AS A RESPONSE TO SOCIAL-MEDIA-DRIVEN TRADING

Expressive Trading and Markets The phenomenon of social-media-driven trading (SMD trading) entered the public consciousness earlier this year when GameStop’s stock price was driven up two orders of magnitude by a “hivemind” of individual investors coordinating their actions via social media. Some believe that GameStop’s price is artificially high and is destined to fall. Yet the stock prices of […]

Does It Pay to Invest in Sustainable Startups?

Sustainable investing (or impact investing) is arguably the hottest topic in global finance. Morningstar reports that ESG-oriented mutual funds’ net capital inflows quadrupled in 2019 to $20 billion, and signatories to the Principles for Responsible Investments (PRI) had $86 trillion assets under management (AuM) in the same year. However, the economics of sustainable investing are contentious […]

Are Foreign Donors Good Monitors?

Economic and accounting literature has long found that foreign investments provide a multitude of benefits to local stock markets and economies. Foreign inflows to for-profit firms are found to harvest not only capital but also managerial and marketing skills in addition to business connections and human resource development. For-profit foreign institutional investors have also been […]