Journal ArticleDOI
R2 around the world: New theory and new tests
Li Jin,Stewart C. Myers +1 more
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TLDR
This article showed that lack of transparency increases R2 by shifting firm-specific risk to managers and that opaque stocks with high R2s are also more likely to crash, that is, to deliver large negative returns.About:
This article is published in Journal of Financial Economics.The article was published on 2006-02-01. It has received 1468 citations till now. The article focuses on the topics: Corporate governance & Stock (geology).read more
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Opaque financial reports, R2, and crash risk
TL;DR: The authors investigated the relation between the transparency of financial statements and the distribution of stock returns and found that opacity is associated with higher R2s, indicating less revelation of firm-specific information.
Posted Content
Corporate Tax Avoidance and Stock Price Crash Risk: Firm-Level Analysis
TL;DR: In this article, a large sample of U.S. firms for the period 1995-2008 was used to show that corporate tax avoidance is positively associated with firm-specific stock price crash risk, which is consistent with the following view: tax avoidance facilitates managerial rent extraction and bad news hoarding activities for extended periods by providing tools, masks, and justifications for these opportunistic behaviors.
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Does board gender diversity improve the informativeness of stock prices
TL;DR: In this paper, the authors show that stock prices of firms with gender-diverse boards reflect more firm-specific information after controlling for corporate governance, earnings quality, institutional ownership and acquisition activity.
Journal ArticleDOI
Corporate tax avoidance and stock price crash risk: Firm-level analysis
TL;DR: In this article, a large sample of U.S. firms for the period 1995-2008 was used to show that corporate tax avoidance is positively associated with stock price crash risk.
Posted Content
Ownership Concentration, Foreign Shareholding, Audit Quality, and Stock Price Synchronicity: Evidence from China
TL;DR: In this paper, the authors investigated the effects of largest-shareholder ownership concentration, foreign ownership, and audit quality on the amount of firm-specific information incorporated into share prices, as measured by stock price synchronicity, of Chinese-listed firms over the 1996-2003 period.
References
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Journal ArticleDOI
Noise Trader Risk in Financial Markets
TL;DR: In this article, the authors present a simple overlapping generations model of an asset market in which irrational noise traders with erroneous stochastic beliefs both affect prices and earn higher expected returns.
Journal Article
Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure
TL;DR: In this paper, the authors integrate elements from the theory of agency, property rights and finance to develop a theory of the ownership structure of the firm and define the concept of agency costs, show its relationship to the separation and control issue, investigate the nature of the agency costs generated by the existence of debt and outside equity, demonstrate who bears costs and why and investigate the Pareto optimality of their existence.
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Risk measurement when shares are subject to infrequent trading
TL;DR: In this paper, the authors present a method for measuring beta when share price data suffer from this problem, using a one-in-three random sample of all U.K. Stock Exchange shares from 1955 to 1974.
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The information content of stock markets: why do emerging markets have synchronous stock price movements?
TL;DR: This paper found that stock prices move together more in poor economies than in rich economies, and this "nding is not due to market size and is only partially explained by higher fundamentals".
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Have Individual Stocks Become More Volatile? An Empirical Exploration of Idiosyncratic Risk
TL;DR: In this paper, the authors used a disaggregated approach to study the volatility of common stocks at the market, industry, and firm levels and found that over the period from 1962 to 1997 there has been a noticeable increase in firm-level volatility relative to market volatility.