Senior Fellows/Fellows

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Senior Fellows/Fellows

Can Socially Responsible Firms Survive Competition Corporate Employee Matching

Ning GONG, Bruce GRUNDY
Employee matching grant schemes are coordination mechanisms that reduce free-riding by socially-conscious employee-donors. Their prevalence demonstrates that socially-responsible firms can survive market competition. When socially-conscious employees are more productive or value working together, ma...
Keywords: Employee matching grants, corporate social responsibility
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Senior Fellows/Fellows

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Senior Fellows/Fellows

The Buyers Perspective on Security Design

Patrick VERWIJMEREN, Bruce GRUNDY
We provide evidence that security design reflects the interplay of capital supplier and security issuer preferences. While call provisions have historically been the default option in convertible security design, only a minority of post-2005 issues are callable. Because hedge funds dominate the mark...
Keywords: Security design, supply of capital, call provisions, convertibles, hedge funds
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Senior Fellows/Fellows

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Senior Fellows/Fellows

The External Financing of Investment

Patrick VERWIJMEREN, Bruce GRUNDY
Controlling for a firm’s existing assets, capital structure and valuation, we document a strong link between an investment’s characteristics and the type of security issued if the investment is externally financed. Investments with more volatile and distant payoffs tend to be equity-financed. In...
Keywords: Investment characteristics, financing, debt-equity choice, convertible securities
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Senior Fellows/Fellows

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Senior Fellows/Fellows

Why Do Option Prices Predict Stock Returns

Luis GONCALVES-PINTO, Allaudeen HAMEED, Thijs VAN DER HEIJDEN, Yichao ZHU
Disagreement between the stock and options markets about the stock’s value can reflect both informed trading in options and temporary price pressure in stocks. We document that the dis-agreement is strongly related to return reversals, order imbalances, and illiquidity in stocks, and weakly relat...
Keywords: Price Pressure, Put-Call Parity, return predictability, Informed Trading
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Senior Fellows/Fellows

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Senior Fellows/Fellows, 2017

Currency Wars-Unconventional Monetary Policy Does Not Stimulate Exports

Andrew K. ROSE
I investigate whether countries that use unconventional monetary policy (UMP) experience export booms. I use a popular gravity model of trade which requires neither the exogeneity of UMP, nor instrumental variables for UMP. In practice, countries that engage in UMP experience a drop in exports vis-Ã...
Keywords: quantitative, easing, negative, nominal, interest, trade, gravity, bilateral, data, empirical
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