Average stock returns for North America, Europe, and Asia Pacific increase with the book-to-market ratio (B/M) and profitability and are negatively related to investment. For Japan the relation between average returns and B/M is strong, but average returns show little relation to profitability or investment. A five-factor model that adds profitability and investment factors to the three-factor model of Fama and French (1993) largely absorbs the patterns in average returns. As in Fama and French (2015a,b), the model’s prime problem is failure to capture fully the low average returns of small stocks whose returns behave like those of low profitability firms that invest aggressively.

International Tests of a Five-Factor Asset Pricing Model

High frequency market microstructure.

The goal of this paper is to advance the understanding of emerging developments in business model design within the field of entrepreneurship. It is widely known that during the start-up process, entrepreneurs need to set up the boundaries of the business and define the product/service to offer. This is a very complex task, especially for new technology-based companies which usually require large investments and have a limited time span (avoiding product obsolescence) to turn the idea into a full-time venture. Although business model design within the entrepreneurship field is a recent topic, it is gaining a growing attention in the literature. The usefulness and predictable power of business models are expected to help entrepreneurs make more informed decisions, thus increasing the chances of success. This article first tackles the specific problems faced by new technology-based firms, linking their needs with the advantages of having a flexible and well-designed business model. Second, different innovative practices aimed at improving business model design are discussed. The paper ends with some recommendations, stressing the need for future empirical work.

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Business model innovation in entrepreneurship

High-speed market connections improve investors' ability to search for attractive quotes in fragmented markets, raising gains from trade. They also enable fast traders to observe market information before slow traders, generating adverse selection, and thus negative externalities. When investing in fast trading technologies, institutions do not internalize these externalities. Accordingly, they overinvest in equilibrium. Completely banning fast trading is dominated by offering two types of markets: one accepting fast traders, the other banning them. However, utilitarian welfare is maximized by having i) a single market type on which fast and slow traders coexist and ii) Pigovian taxes on investment in the fast trading technology.

Equilibrium fast trading

Corporate accelerators: Building bridges between corporations and startups

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Clifford S. Ang

Papers

How Stable Are Corporate Capital Structures

Accruals, Cash Flows, and Operating Profitability in the Cross Section of Stock Returns

High-Frequency Trading and Price Discovery

The New Corporate Garage

International Stock Return Predictability: What Is the Role of the United States?