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Generalist CEOs and stock price crash risk (2024)
Journal Article
Fang, X., Girardone, C., Li, Y., & Zeng, Y. (2024). Generalist CEOs and stock price crash risk. Journal of Business Finance and Accounting, https://doi.org/10.1111/jbfa.12804

We investigate whether generalist chief executive officers (CEOs), that is, CEOs who gain transferable skills across firms and industries, have less incentive to hoard bad news. To address endogeneity concerns stemming from firm–CEO matching, we depl... Read More about Generalist CEOs and stock price crash risk.

Proximity to Bank Headquarters and Branch Efficiency: Evidence from Mortgage Lending (2024)
Journal Article
Lim, I., Nguyen, L. D. D., Nguyen, L., & Wilson, J. O. (2024). Proximity to Bank Headquarters and Branch Efficiency: Evidence from Mortgage Lending. Journal of Money, Credit and Banking, https://doi.org/10.1111/jmcb.13142

We use the staggered introduction of new flight routes to identify reductions in travel time between banks’ headquarters and branches to examine their effects on branch outputs and efficiency. Reductions in headquarters–branch travel time increases b... Read More about Proximity to Bank Headquarters and Branch Efficiency: Evidence from Mortgage Lending.

A model of managerial compensation, firm leverage and credit stimulus (2024)
Journal Article
Chakraborti, R., Dahiya, S., Ge, L., & Gete, P. (2024). A model of managerial compensation, firm leverage and credit stimulus. Journal of Financial Stability, 72, Article 101248. https://doi.org/10.1016/j.jfs.2024.101248

We study a model in which leverage and compensation are both choice variables for the firm and borrowing spreads are endogenous. First, we analyze the correlation between leverage and variable compensation. We show that allowing for... Read More about A model of managerial compensation, firm leverage and credit stimulus.

Do young CEOs matter for corporate digital transformation? (2024)
Journal Article
Zou, Z., Fu, J., Zeng, Y., & Huang, Y. (2024). Do young CEOs matter for corporate digital transformation?. Economics Letters, 237, Article 111636. https://doi.org/10.1016/j.econlet.2024.111636

This paper investigates the empirical relation between CEO age and corporate digital transformation. Using a sample of Chinese listed firms between 2007 and 2022, we find that younger CEOs exhibit a higher propensity to engage in di... Read More about Do young CEOs matter for corporate digital transformation?.

The Effects of Regulatory Office Closures on Bank Behavior (2024)
Journal Article
Lim, I., Hagendorff, J., & Armitage, S. (2024). The Effects of Regulatory Office Closures on Bank Behavior. Journal of Money, Credit and Banking, https://doi.org/10.1111/jmcb.13126

We investigate if the decentralized structure of regulatory office networks influences supervisory outcomes and bank behavior. Following the closure of an office, banks previously supervised by that office increase their lending and risk-taking. As a... Read More about The Effects of Regulatory Office Closures on Bank Behavior.

Managing liquidity along the supply chain: Supplier-base concentration and corporate cash policy (2024)
Journal Article
Di, L., Jiang, W., Mao, J., & Zeng, Y. (2024). Managing liquidity along the supply chain: Supplier-base concentration and corporate cash policy. European Financial Management, https://doi.org/10.1111/eufm.12479

We find that customer firms with more concentrated supplier bases tend to hold higher levels of cash reserves. The positive relation between supplier-base concentration and cash holdings is more pronounced for firms with non-state ownership, higher m... Read More about Managing liquidity along the supply chain: Supplier-base concentration and corporate cash policy.

Arbitrage problems with reflected geometric Brownian motion (2023)
Journal Article
Buckner, D., Dowd, K., & Hulley, H. (2024). Arbitrage problems with reflected geometric Brownian motion. Finance and Stochastics, 28(1), 1-26. https://doi.org/10.1007/s00780-023-00525-x

Contrary to the claims made by several authors, a financial market model in which the price of a risky security follows a reflected geometric Brownian motion is not arbitrage-free. In fact, such models violate even the weakest no-arbitrage condition... Read More about Arbitrage problems with reflected geometric Brownian motion.

Your gender identity is who you are: Female chief executive officers and corporate debt structure (2023)
Journal Article
Huang, Y., Zhu, Q., Yan, C., & Zeng, Y. (2023). Your gender identity is who you are: Female chief executive officers and corporate debt structure. International Journal of Finance and Economics, https://doi.org/10.1002/ijfe.2923

By leveraging sample data from S&P 1500 companies for the 1993–2021 period, we execute an empirical examination of the effects of chief executive officer (CEO) gender on a company’s debt structure. We find that after endogeneity is controlled, compan... Read More about Your gender identity is who you are: Female chief executive officers and corporate debt structure.

Sukūk Development and Income Inequality (2023)
Journal Article
Jatmiko, W., Ebrahim, M., & Smaoui, H. (2023). Sukūk Development and Income Inequality. Journal of International Financial Markets, Institutions and Money, 88, Article 101852. https://doi.org/10.1016/j.intfin.2023.101852

This paper investigates the link between sukūk development and income inequality by scrutinizing twenty-two countries’ data from 1995 to 2019. We employ the two-stage Fractional Regression Model to illustrate that sukūk issuance is associated with in... Read More about Sukūk Development and Income Inequality.

Uncertainty and Bubbles in Cryptocurrencies: Evidence from Newly Developed Uncertainty Indices (2023)
Journal Article
Chowdhury, M. S. R., & Damianov, D. S. (2023). Uncertainty and Bubbles in Cryptocurrencies: Evidence from Newly Developed Uncertainty Indices. International Review of Financial Analysis, Article 102949. https://doi.org/10.1016/j.irfa.2023.102949

In this paper, we examine whether newly developed crypto price and policy uncertainty indices based on news coverage (Lucey et al., 2022) are associated with the emergence of bubbles in cryptocurrencies. Using probit regressions, we show that these i... Read More about Uncertainty and Bubbles in Cryptocurrencies: Evidence from Newly Developed Uncertainty Indices.

Bond Issuance and the Funding Choices of European Banks: The Consequences of Public Debt (2023)
Journal Article
Rancan, M., Cariboni, J., Keasey, K., & Vallascas, F. (2023). Bond Issuance and the Funding Choices of European Banks: The Consequences of Public Debt. Journal of Empirical Finance, 74, Article 101417. https://doi.org/10.1016/j.jempfin.2023.101417

European banks raise less funds in the bond market when there is a larger public debt in their national economies and this is reflected in lower leverage. We exploit numerous sources of heterogeneity in our data to demonstrate this result is driven b... Read More about Bond Issuance and the Funding Choices of European Banks: The Consequences of Public Debt.

Extremal quantiles and stock price crashes (2023)
Journal Article
Andreou, P., Anyfantaki, S., Maasoumi, E., & Sala, C. (2023). Extremal quantiles and stock price crashes. Econometric Reviews, https://doi.org/10.1080/07474938.2023.2241223

We employ extreme value theory to identify stock price crashes, featuring low-probability events that produce large, idiosyncratic negative outliers in the conditional distribution. Traditional methods employ approximations under Gaussian assumptions... Read More about Extremal quantiles and stock price crashes.

A market consistent approach to the valuation of no-negative equity guarantees and equity release mortgages (2023)
Journal Article
Buckner, D., Dowd, K., & Hulley, H. (2023). A market consistent approach to the valuation of no-negative equity guarantees and equity release mortgages. Journal of Demographic Economics, 89(3), 349-372. https://doi.org/10.1017/dem.2023.6

This paper provides a new market consistent approach to the valuation of No Negative Equity Guarantees and Equity Release Mortgages. The paper provides a new approach to the estimation of the volatility inputs. The proposed approach to volatility pro... Read More about A market consistent approach to the valuation of no-negative equity guarantees and equity release mortgages.

Precautionary motive or private benefit motive for holding cash: Evidence from CEO ownership (2023)
Journal Article
Yin, C., Sun, W., & Zeng, Y. (2023). Precautionary motive or private benefit motive for holding cash: Evidence from CEO ownership. International Review of Financial Analysis, 90(November 2023), Article 102820. https://doi.org/10.1016/j.irfa.2023.102820

This study examines how CEO ownership affects the motivation of firms to hold cash. We document a monotonic and positive relationship between CEO ownership and cash holdings. The effect is more pronounced for firms with higher firm-specific risk and... Read More about Precautionary motive or private benefit motive for holding cash: Evidence from CEO ownership.

Flight to Lottery Ahead of FOMC Announcements: Institutional Investors or Retail Investors? (2023)
Journal Article
Guo, H., Hung, C. D., Kontonikas, A., & Zeng, Y. (2023). Flight to Lottery Ahead of FOMC Announcements: Institutional Investors or Retail Investors?. British Journal of Management, https://doi.org/10.1111/1467-8551.12755

This paper studies the pre-Federal Open Market Committee (FOMC) announcement drift at the stock level. We hypothesize that investors have a higher propensity to speculate before the monetary policy announcements by the FOMC, due to the resolution of... Read More about Flight to Lottery Ahead of FOMC Announcements: Institutional Investors or Retail Investors?.

Earnings Expectations and the Quality of Financial Services (2023)
Journal Article
Shi, X., Nguyen, . D. D. (., & Wang, M. (2023). Earnings Expectations and the Quality of Financial Services. Journal of Accounting and Public Policy, 42(4), Article 107115. https://doi.org/10.1016/j.jaccpubpol.2023.107115

Using complaint data filed by consumers with the Consumer Financial Protection Bureau against financial institutions, we show that banks receive, on average, 13.3% more customer complaints in the quarter immediately after they narrowly beat analy... Read More about Earnings Expectations and the Quality of Financial Services.

Implicit guarantees and the rise of shadow banking: The case of trust products (2023)
Journal Article
Allen, F., Gu, X., Li, C. W., Qian, J. "., & Qian, Y. (2023). Implicit guarantees and the rise of shadow banking: The case of trust products. Journal of Financial Economics, 149(2), 115-141. https://doi.org/10.1016/j.jfineco.2023.04.012

Implicit guarantees provided by financial intermediaries are a key component of China's shadow banking sector. We show theoretically that project screening by intermediaries, accompanied by their implicit guarantees to investors, can be the second-be... Read More about Implicit guarantees and the rise of shadow banking: The case of trust products.

Does Shareholder Litigation Risk Cause Public Firms to Delist? Evidence from Securities Class Action Lawsuits (2023)
Journal Article
Brogaard, J., Le, N., Nguyen, D. D., & Sila, V. (2023). Does Shareholder Litigation Risk Cause Public Firms to Delist? Evidence from Securities Class Action Lawsuits. Journal of Financial and Quantitative Analysis, 1-55. https://doi.org/10.1017/s0022109023000571

Using three exogenous shocks to ex ante litigation risk, including federal judge ideology and two influential judicial precedents, we find that lower shareholder litigation risk reduces a firm’s propensity to delist from the U.S. stock markets. The e... Read More about Does Shareholder Litigation Risk Cause Public Firms to Delist? Evidence from Securities Class Action Lawsuits.