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We use a natural experiment to investigate the impact of participation constraints on individuals' decisions to invest in the stock market. Unexpected inheritance due to sudden deaths results in exogenous variation in financial wealth, and allows us to examine whether fixed entry and ongoing participation costs cause non-participation. We have three key(More)
The usual disclaimer applies. Financial support from The University of British Columbia and the Entrepreneurship Research Alliance at UBC is gratefully acknowledged. Earlier versions of this paper appeared under the title " Preemption Risk and the Valuation of R&D Ventures ". Abstract I analyze the impact of competition on the risk premia of R&D ventures(More)
Any opinions expressed here are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science,(More)
We examine the relations between mutual fund risk-taking behaviors and local religious beliefs. We find that funds located in regions with lower Protestant population or higher Catholic population tend to have higher volatilities of fund returns, consistent with Protestants (Catholics) being more (less) risk-averse compared to general population. The(More)
One of the most prominent stylized facts in corporate finance is that firms are more likely to issue equity following periods of high stock returns. We document that firms exhibit such timing behavior only in response to high returns that coincide with strong institutional investor demand for their stock. When not accompanied by institutional purchases,(More)
– We examine whether exogenous shocks to firms' information environments generated by Regulation Fair Disclosure (Reg FD) and Sarbanes-Oxley Act (SOX) influenced the degree of local bias of institutional investors. Our main conjecture is that as financial regulation makes the information environment more competitive, the local informational advantage of(More)
Financial misconduct (FM) varies across cities, and over time. City-level FM is highly correlated with political corruption (enforced non-locally), and with ethically questionable (but not illegal) behavior by local physicians, both inconsistent with regional variation in enforcement. Further, among firms for whom detection is likely very similar(More)
This paper examines the preferences of institutional investors for firm policies and the relationship between these preferences and firm decisions. I find that institutions exhibit systematic differences in their preferences for financial and investment policies of the firms they invest in. Furthermore, these preferences are related to subsequent changes in(More)
We propose a new role for private investments in public equity (PIPEs) as a mechanism to reduce coordination frictions among existing equity holders. We establish a causal link between the coordination ability of incumbent shareholders and PIPE issuance. This result obtains even after controlling for alternative explanations such as information asymmetry(More)