This study examines investor herding behavior in Pacific-Basin equity markets. We find that herding is present in both rising and falling markets. Importantly, the level of herding is time-varying. We also find that herding is positively related to stock returns, but negatively related to market volatility. Herding estimates across markets are positively correlated, signifying co-movement of in...

Article history: Using objective measures Received 4 January 2008 Received in revised form 3 December 2008 Accepted 8 December 2008 Available online 14 December 2008

Executive Compensation and Investor Clientele Executive compensation has increased dramatically in recent times, but so has trading volume and individual investor access to financial markets. We provide a model where some managers may understate asset values through misleading statements in order to have enough of a cushion to compensate themselves. Owing to a lack of sophistication or näıveté,...

We examine the differential impact of Regulation Fair Disclosure (Reg FD) on firms with an established professional investor relations (IR) presence at the time of the regulation. About 25% of publicly listed firms employ a professional IR member yet we know relatively little about the role of IR. We find IR firms more than double their level of public disclosure post-Reg FD consistent with Reg...

Research indicates that individual investors trade excessively and underperform the market indices, Barber and Odean (2000). The purpose of this paper is to help explain which behavioral biases, if any, can explain this result using a simulation approach. Results indicate that putting too much weight on the current environment, anchoring, is the largest factor in explaining individual investor ...

This paper tests the hypotheses that poor investor-protection environments lead to higher information asymmetry in security markets. We compare China-based stocks, which operate in a relatively unprotected environment, to Hong Kong-based stocks. The information component in the market friction of China stocks is shown to be up to 20% larger than that of Hong Kong-based stocks. The effect is rob...

Poor communities sometimes resist private investment and destroy economic surplus even if the government has the willingness and ability to redistribute. We interpret such acts of resistance as demands for redistribution: Destruction contains credible information about how affected groups value surplus, which helps the government in implementing the optimal redistribution policy. Destruction is...