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Research Summary In this study, we replicate and expand Hawn et al.’s study (Strategic Management Journal, 2018, 39, 949–976) that used Dow Jones Sustainability World Index (DJSI) events to measure variations in firms' Corporate Social Responsibility (CSR)‐activism and examined their effect on a firm's stock price. We use DJSI events to capture variations in firms' CSR visibility, holding CSR activism constant by restricting our analyses to CSR‐equivalent firms. First, we find similar results on stock price (i.e., no impact) and on trading volumes. Second, because professional market participants pay more attention to CSR‐oriented firms and use visible cues such as DJSI events, we study and find that additions to DJSI lead to more analysts following a firm, and that continuations on the DJSI lead to an increase in equity being held by long‐term investors. Managerial Summary We replicate and complement a recent study that showed that the events of a firm's addition, continuation, or deletion in a major sustainability index (DJSI) had little impact on stock market reactions (Hawn et al. Strategic Management Journal, 2018, 39, 949–976). We redefine the comparison set that was previously used and compare across observationally equivalent firms in terms of CSR orientation in order to isolate the visibility effect of DJSI events. We find that these events do not significantly impact stock price and trading volumes. However, we expand the analysis and find that sustainability events attract more attention from financial analysts and lead to an increase in the percentage of shares held by long‐term investors indicative of a trend that professional investors pay more attention to CSR‐visible firms over time.

This paper investigates the determinants of value and growth investing in a large administrative panel of Swedish residents over the 1999-2007 period. We document strong relationships between a household's portfolio tilt and the household's financial and demographic characteristics. Value investors have higher financial and real estate wealth, lower leverage, lower income risk, lower human capital, and are more likely to be female than the average growth investor. Households actively migrate to value stocks over the life-cycle and, at higher frequencies, dynamically offset the passive variations in the value tilt induced by market movements. We verify that these results are not driven by cohort effects, financial sophistication, biases toward popular or professionally close stocks, or unobserved heterogeneity in preferences. We relate these household-level results to some of the leading explanations of the value premium.

This paper was presented for the first time during the 2018 SASE Annual Conference that was held in June 2018 at Doshisha University. A revised version of this paper is to be published in The Japanese Political Economy.; This paper aims at finding out how the shareholder-value pursuit has affected labor policies at large Japanese listed enterprises. It concentrates on the issue of labor bifurcation, whereby the proportion of nonregular employees has grown rapidly over the last two decades, currently approaching the numbers of regular employees.In Japan, corporate governance reforms became key to structural macroeconomic changes according to the 2013 “Japan Revitalization Strategy” formulated by the Cabinet Office. This document mandated the creation of the JPX-Nikkei Index 400 – an index called to accommodate the most investor-friendly joint-stock companies. The move towards a shareholder model has been further reinforced through a rapid surge in foreignstockholding that started during the post-bubble period of the mid-1990s. At the same time, the externalities of increased returns to stockholders have been the changes in the related domains of management and labor, which I explain through the application of the political economic theory. This theory underlines the importance of inclusion into a “political bloc” for being eligible for economic benefits. Consequently, I argue that increased returns to politically privileged shareholders have been achieved at the expense of a growing proportion of unprivileged nonregular employees.The evidence yields support to the argument about the positive correlation between shareholder value and the proportion of nonregulars. On the other hand, foreign stockholding does not appear to be significantly correlated with the increase in nonregular employment. In turn, the study has found that the proportion of nonregular employees is significantly correlated with domestic ownership that characterizes higher managerial entrenchment.

This paper shows that bailouts of private agents can optimally take the form of asset purchases, even if this also means paying off external asset holders, in the presence of borrowing constraints and asymmetric information on liquidity needs. The combination of these two ingredients make direct compensation through loans and/or net transfers imperfect. Thus, when more constrained agents are also more exposed to the asset, the compensation through asset purchases becomes desirable. Anticipating these purchases, private agents engage in a collective bet on the defaulting asset, leading to an equilibrium implicit guarantee, where even an intrinsically worthless asset can be traded at a positive price.

I structurally estimate a life-cycle model of portfolio choices that incorporates the relationship between stock market returns and the cross-sectional skewness of idiosyncratic labor income shocks. The cyclicality of this skewness can explain (i) why young households with modest financial wealth do not participate in the stock market and (ii) why, conditional on participation, the share of financial wealth invested in equity slightly increases with age until retirement. With an estimated relative risk aversion of 5 and yearly participation cost of $290, the model matches the evolution of wealth, of stock market participation and of the equity share of participants over the life-cycle. Without cyclical skewness, the same model requires a risk aversion above 10 or a participation cost above $1,000 to match the average equity share and cannot explain its decline over the life-cycle. Nonetheless, cyclical skewness reduces the aggregate demand for equity by at most 15%.

Speculators can discover whether a signal is true or false by processing it but this takes time. Hence they face a trade-off between trading fast on a signal (i.e., before processing it), at the risk of trading on a false positive, or trading after processing the signal, at the risk that prices already reflect their information. The number of speculators who choose to trade fast increases with news reliability and decreases with the cost of fast trading technologies. The authors derive testable implications for the effects of these variables on (i) the value of information, (ii) patterns in returns and trades, (iii) the frequency of price reversals in a stock, and (iv) informational efficiency. Cheaper fast trading technologies simultaneously raise informational efficiency and the frequency of "mini-flash crashes": large price movements that revert quickly.

We find evidence supporting the hypothesis that countries at times misreport their economic data in a strategic manner. Among those suspected are countries with fixed exchange rate regimes, high negative net foreign asset positions or negative current account balances, which corroborates the intuition developed with a simple economic model. We also find that countries with bad institutional quality rankings and those in Africa, Middle East, Eastern Europe and Latin America release economic data of questionable veracity. Our evidence calls for models with public signals to consider strategic misinformation and for establishing independent statistical agencies to assure the delivery of high quality economic data.