Annual Conference

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Trade, Growth and Development

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May 2025

Innovation Networks and R&D Allocation

Ernest LIU, Song MA
We study the cross-sector allocation of R&D resources in an innovation network, where one sector’s past innovations may benefit other sectors’ future innovations. We solve for the optimal R&D allocation and show that a planner valuing long-term growth should allocate more R&D toward ...
Keywords: Innovation, Networks, Resource Allocation
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Annual Conference

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Trade, Growth and Development

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May 2025

Disentangling Various Explanations for the Declining Labor Share: Evidence from Millions of Firm Records

Ann HARRISON
This paper uses millions of records from a cross-country and time series database of establishments for France, Germany, Hungary, Sweden, and South Korea to disentangle the role of technological change, intangible assets, market power, and globalization in driving changes in the labor share. This is...
Keywords: labor share, globalization, technological change, market power, inequality, labor demand
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Annual Conference

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Investment Finance

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May 2025

The Rise of Factor Investing: Asset Market Implications and “Passive” Security Design

Lin William CONG, Shiyang HUANG, Douglas XU
We model financial innovations such as Exchange-Traded Funds, smart beta products, and many index-based vehicles as composite securities (CSs) that facilitate trading the common factors in assets’ liquidation values. Through accessing a larger basket of assets in endogenously chosen proportions, C...
Keywords: Asset Pricing, ETFs, Indexing, Informational Efficiency, Security Design
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Annual Conference

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Investment Finance

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May 2025

The Impact of Introducing a (Nearly) Redundant Security: Evidence from Malaysian Corporate Bonds

Antje BERNDT, Jean HELWEGE, Amanda LIU, Frank PACKER
We examine the case of redundant securities in Malaysia, where traditional corporate bonds and non-conventional (NC) Islamic bonds are issued. Because religious investors only buy Islamic bonds and non-religious (NR) investors are indifferent between the two types of bonds, if the issuance costs are...
Keywords: redundant securities, corporate bonds, bond liquidity, Islamic bonds, Malaysia
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Annual Conference

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Investment Finance

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May 2025

Daily Momentum and New Investors in Emerging Stock Markets

Zhenyu GAO, Wenxi JIANG, Wei A. XIONG, Wei XIONG
Despite the dominance of retail investors, the Chinese stock market lacks price momentum in weekly and monthly returns. However, this study uncovers significant daily price momentum, driven by the attention and trading behaviors of new investors. This phenomenon, rooted in emerging markets’ unique...
Keywords: Momentum effect, retail investor, new investor, emerging markets
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