Author
John Asker
Other affiliations: Harvard University, National Bureau of Economic Research, New York University ...read more
Bio: John Asker is an academic researcher from University of California, Los Angeles. The author has contributed to research in topics: Common value auction & Investment (macroeconomics). The author has an hindex of 18, co-authored 58 publications receiving 2534 citations. Previous affiliations of John Asker include Harvard University & National Bureau of Economic Research.
Papers published on a yearly basis
Papers
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TL;DR: In this paper, the authors investigate whether short-termism distorts the investment decisions of stock market listed firms and show that compared to private firms, public firms invest substantially less and are less responsive to changes in investment opportunities, especially in industries in which stock prices are most sensitive to earnings news.
Abstract: We investigate whether short-termism distorts the investment decisions of stock market listed firms. To do so, we compare the investment behavior of observably similar public and private firms using a new data source on private U.S. firms, assuming for identification that closely held private firms are subject to fewer short-termist pressures. Our results show that compared to private firms, public firms invest substantially less and are less responsive to changes in investment opportunities, especially in industries in which stock prices are most sensitive to earnings news. These findings are consistent with the notion that short-termist pressures distort their investment decisions.
481 citations
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TL;DR: The authors investigated whether short-termism distorts the investment decisions of stock market-listed firms and found that public firms invest substantially less and are less responsive to changes in investment opportunities, especially in industries in which stock prices are most sensitive to earnings news.
Abstract: We investigate whether short-termism distorts the investment decisions of stock market-listed firms. To do so, we compare the investment behavior of observably similar public and private firms, using a new data source on private U.S. firms and assuming for identification that closely held private firms are subject to fewer short-termist pressures. Our results show that compared with private firms, public firms invest substantially less and are less responsive to changes in investment opportunities, especially in industries in which stock prices are most sensitive to earnings news. These findings are consistent with the notion that short-termist pressures distort investment decisions.
375 citations
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TL;DR: A systematic analysis of equilibrium behaviour in scoring auctions when suppliers’ private information is multidimensional is provided and it is shown that scoring auctions dominate several other commonly used procedures for buying differentiated products.
Abstract: This article studies scoring auctions, a procedure commonly used to buy differentiated products. suppliers submit offers on all dimensions of the good (price, level ofnonmonetary attributes), and these are evaluated using a scoring rule. We provide a systematic analysis of equilibrium behavior in scoring auctions when suppliers 'private information is multidimensional (characterization of equilibrium behavior and expected utility equivalence). In addition, we show that scoring auctions dominate several other commonly used procedures for buying differentiated products, including menu auctions, beauty contests, and price-only auctions with minimum quality thresholds.
323 citations
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TL;DR: In this paper, the authors investigate the role of dynamic production inputs and their associated adjustment costs in shaping the dispersion of static measures of capital misallocation within industries (and countries).
Abstract: We investigate the role of dynamic production inputs and their associated adjustment costs in shaping the dispersion of static measures of capital misallocation within industries (and countries). Across nine data sets spanning 40 countries, we find that industries exhibiting greater time-series volatility of productivity have greater cross-sectional dispersion of the marginal revenue product of capital. We use a standard investment model with adjustment costs to show that variation in the volatility of productivity across these industries and economies can explain a large share (80–90 percent) of the cross-industry (and cross-country) variation in the dispersion of the marginal revenue product of capital.
268 citations
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TL;DR: In this paper, the authors examined bidding in over 1,700 knockout auctions used by a bidding cartel (or ring) of stamp dealers in the 1990s and found that non-ring bidders suffered damages that were of the same order of magnitude as those of the sellers.
Abstract: This paper examines bidding in over 1,700 knockout auctions used by a bidding cartel (or ring) of stamp dealers in the 1990s. The knockout was conducted using a variant of the model studied by Daniel Graham, Robert Marshall, and Jean-Francois Richard (1990). Following a reduced form examination of these data, damages, induced inefficiency, and the ring's benefit from colluding are estimated using a structural model in the spirit of Emmanuel Guerre, Isabelle Perrigne, and Quang Vuong (2000). A notable finding is that nonring bidders suffered damages that were of the same order of magnitude as those of the sellers.
184 citations
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TL;DR: In this paper, applied researchers in corporate finance can address endogeneity concerns, including omitted variables, simultaneity, and measurement error, and discuss a number of econometric techniques aimed at addressing endogeneity problems, including instrumental variables, difference-in-differences estimators, regression discontinuity design, matching methods, panel data methods, and higher order moments estimators.
Abstract: This chapter discusses how applied researchers in corporate finance can address endogeneity concerns. We begin by reviewing the sources of endogeneity—omitted variables, simultaneity, and measurement error—and their implications for inference. We then discuss in detail a number of econometric techniques aimed at addressing endogeneity problems, including instrumental variables, difference-in-differences estimators, regression discontinuity design, matching methods, panel data methods, and higher order moments estimators. The unifying themes of our discussion are the emphasis on intuition and the applications to corporate finance.
1,460 citations
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TL;DR: In this paper, the authors examined the effects of financial analysts on the real economy in the case of innovation and found that firms covered by a larger number of analysts generate fewer patents and patents with lower impact.
Abstract: We examine the effects of financial analysts on the real economy in the case of innovation. Our baseline results show that firms covered by a larger number of analysts generate fewer patents and patents with lower impact. To establish causality, we use a difference-in-differences approach that relies on the variation generated by multiple exogenous shocks to analyst coverage, as well as an instrumental variable approach. Our identification strategies suggest a negative causal effect of analyst coverage on firm innovation. The evidence is consistent with the hypothesis that analysts exert too much pressure on managers to meet short-term goals, impeding firms’ investment in long-term innovative projects. We further discuss possible underlying mechanisms through which analysts impede innovation and show that there is a residual effect of analysts on innovation even after controlling for these mechanisms. Our paper offers novel evidence on a previously under-explored adverse consequence of analyst coverage — its hindrance to firm innovation.
778 citations