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For a sample of 42 countries, I examine firms whose controlling shareholders and top managers are members of national parliaments or governments. I find that this overlap is quite widespread, especially in highly corrupted countries. Connected companies enjoy easier access to debt financing, lower taxation, and stronger market power. These benefits increase(More)
We propose a new and direct measure of investor attention using search frequency in Google (Search Volume Index (SVI)). In a sample of Russell 3000 stocks from 2004 to 2008, we find that SVI (1) is correlated with but different from existing proxies of investor attention; (2) captures investor attention in a more timely fashion and (3) likely measures the(More)
and the many officials at various stock exchanges, regulatory agencies and research institutes that have helped me to gather this information. Most of these sources are listed in Appendix F, along with country-specific information. Any inaccuracies or errors are, of course, entirely my own, and I would be grateful to have them pointed out. There has been a(More)
Prior research has assumed that underwriters post a stabilizing bid in the after-market. We find instead that aftermarket activities are less transparent and include stimulating demand through short covering and restricting supply by penalizing the f lipping of shares. In more than half of IPOs, a short position of an average 10.75 percent of shares offered(More)
SOES bandits are individual investors who use Nasdaq's Small Order Execution System (SOES) for day trading. Their average profit per trade is small, but they trade dozens or hundreds of times per week. Bandits usually establish a position before most market-makers have updated their quotes, and lay off the position at favorable prices through Instinet or(More)
Using a database of more than 1.85 million retail investor transactions over 1991– 1996, we show that these trades are systematically correlated—that is, individuals buy (or sell) stocks in concert. Moreover, consistent with noise trader models, we find that systematic retail trading explains return comovements for stocks with high retail concentration(More)
We study stock holdings and trading behavior of more than 60,000 households and find evidence consistent with dividend clienteles. Retail investor stock holdings indicate a preference for dividend yield that increases with age and decreases with income, consistent with age and tax clienteles, respectively. Trading patterns reinforce this evidence: Older,(More)
A traditional explanation for stock splits is that they increase the number of small shareholders who own the stock. A possible reason for the increase is that the minimum bid-ask spread is wider after a split and brokers have more incentive to promote a stock. I document a large number of small buy orders following Nasdaq and NYSE/Amex splits during(More)
  • Simona Mola, Tim Loughran, +8 authors Paula Tkac
  • 2003
An analysis of 4,814 SEOs during 1986-1999 indicates that the average offering of new shares is priced at a discount of 3.0% from the closing price on the day before the issue. Discounts have risen steadily over time, sharply increasing the indirect costs of issuing seasoned equity. There is evidence of increased clustering of offer prices at integers, and(More)
This study shows that U.S. individual investors hold under-diversified portfolios, where the level of under-diversification is greater among younger, low-income, less-educated, and less-sophisticated investors. The level of under-diversification is also correlated with investment choices that are consistent with over-confidence, trend-following behavior,(More)