Annual Conference

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Accounting, Senior Fellows/Fellows

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May 2015

Particles, Pollutions and Prices

Yupeng LIN, Oliver Zhen LI, Xiaoli HU
We investigate whether a sentiment effect arising from poor air quality impacts stock prices. We find little evidence suggesting that local air quality directly affects stock prices. However, we show that the local air quality index (which is increasing in air pollution) relative to that of Beijing ...
Keywords: China, Pollution, Stock Return, Behavioral bias
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Annual Conference

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Corporate Finance

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May 2015

Political Turnover, Ownership, and Corporate Investment

Sili ZHOU, Brandon JULIO, Tiecheng LENG, Jerry CAO
We examine the impact of political influence and ownership on corporate investment by exploiting the unique way provincial leaders are selected and promoted in China. The tournament-style promotion system creates incentives for new provincial governors to exert their influence over capital allocatio...
Keywords: Corporate investment, Political turnover, China, SOE, Political uncertainty, Grabbinghand, Crowding out, Investment
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Annual Conference

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Investment Finance, Senior Fellows/Fellows

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May 2015

Destabilizing Financial Advice: Evidence from Pension Fund Reallocations

Clemens SIALM, Borja LARRAIN, Da ZHI, Jose TESSADA
We document a novel channel through which coordinated trading exerts externalities on financial markets. We study the impact of a financial advisory firm that recommends frequent reallocations between equity and bond funds to Chilean pension investors. The recommendations generate large and coordina...
Keywords: Coordinated Noise Trading, Pension Funds, Price Pressure
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Annual Conference

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International Macroeconomics, Money & Banking, Senior Fellows/Fellows

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May 2015

Spare Tire? Stock Markets, Banking Crises, and Economic Recoveries

Andrea LU, Chen LIN, Ross LEVINE, Xie WENSI
Do stock markets act as a spare tire during banking crises, providing an alternative corporate financing channel and mitigating the economic severity of these crises? Using firm-level data in 36 countries from 1990 through 2011, we find that the adverse consequences of banking crises on equity issua...
Keywords: Shareholder protection laws, Corporate finance, financial crises, Firm profits, Firm investment choices
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Annual Conference

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International Macroeconomics, Money & Banking

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May 2015

Stages of Development and Evolving Constraints to Growth

Shang-Jin WEI, Han XUEHUI
Do middle-income countries face difficult challenges producing consistent growth? Using transition matrix analysis, we can easily reject any unconditional notion of a “middle-income trap” in the data. However, countries have different fundamentals and policies. Using a non-parametric classificat...
Keywords: Economic growth, Growth determinants, Middle-income trap, Infrastructure, Conditional inference regression tree
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