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Finance

Cash Crop
10 months ago

Cash Crop

By  •  Finance

Does access to more money cause economic growth? And if it does, exactly how does finance sow productivity? A swath of Midwestern cornfields, it turns out, holds the answer.

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Alumni Club
10 months ago

Alumni Club

By  •  Financial Markets

If you’re a mutual fund manager, school connections with a CEO can have an excellent effect on your investments. School ties, research shows, are good for connected investors and even better for CEO salaries. But are they good for everyone else?

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Recipe For Success
11 months ago

Recipe For Success

By  •  Investing

Like viewers following a cooking show, index fund managers buy stocks in the same companies and same proportions as those listed in a stock index. The best index funds perform surprisingly closely to the best active funds, but at a lower cost. And the worst active funds perform far worse than the worst index funds.

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Happy Campers
11 months ago

Happy Campers

By  •  Investing

What really impresses investors? They value firms that can pull off a balancing act, pleasing both their customers and their employees simultaneously. Rice researchers find that consistently treating both groups well leads to higher long-term value from investors, but that low ratings from one stakeholder group can undermine any value added by high ratings from the other.

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Failure To Communicate
11 months ago

Failure To Communicate

By  •  Investing

Lazar Zamenhof dreamed of ending global misunderstanding with a common language, Esperanto. The scheme didn’t work out, but global business could probably use it. In a groundbreaking study, Professor Patricia Naranjo shows what happens to stock prices during a conference call in which participants speak faulty English.

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Sweet Spot
11 months ago

Sweet Spot

By  •  Innovation

Diversity on innovative projects has a more complex effect than once thought. Technical reviewers react neutrally to industry diversity. Business reviewers react to it less well

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Quantity, Quantity, Quantity
1 year ago

Quantity, Quantity, Quantity

By  •  Finance

Most companies tend to underperform after they raise capital. But recent research shows that net financing matters more than the composition of financing.

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Wheel of Fortune
1 year ago

Wheel of Fortune

By  •  Personal Finance

Personal savings: Americans who based their savings on a cyclical time orientation had a 78 percent higher savings rate than those who followed a more traditional Western orientation.

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Bread Winners
1 year ago

Bread Winners

By  •  CEO Compensation

Executive pay tends to reflect specific firm characteristics and needs. But an important portion of an executive’s paycheck falls within the discretion of company boards, and the basis of that discretionary pay is still a puzzle.

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Trust Me On This
1 year ago

Trust Me On This

By  •  Lending

Lenders are more likely to fully fund loans and give better interest rates to borrowers they perceive as trustworthy. Moreover, appearance-based judgments of trustworthiness are usually accurate: borrowers who look more trustworthy really are more likely to repay loans.

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Weather Permitting
2 years ago

Weather Permitting

By  •  Commodities

Weather-sensitive commodity markets are buffeted by important information – mostly news about the weather – 24/7. Taking advantage of this trait in weather-sensitive markets, researchers at Rice Business have discovered that information plays a big role in price fluctuations in commodity markets.

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Wild Ride
2 years ago

Wild Ride

By  •  Tech Stocks

Why did Stock Prices Fluctuate so Dramatically During the Internet Boom?

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Follow The Money
2 years ago

Follow The Money

By  •  Advertising

When local firms spend big on advertising, they influence media coverage. For firms with headquarters near local papers, this increased coverage boosts stock market valuations. Local media give local investors disproportionately positive but not necessarily accurate information about the value of locally headquartered firms.

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Getting To Know You
2 years ago

Getting To Know You

By  •  Startups

Startups can profit from partnering with newer venture capital firms, which have an advantage when analyzing startup companies.

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Taking The Wall Street Walk
2 years ago

Taking The Wall Street Walk

By  •  Investing

High stock value helps create blocks, but blocks should not be created with the idea that they’ll improve a firm’s governance or performance. High liquidity actually jeopardizes the block’s continued existence, because as time passes, the blockholder becomes more likely to cash out than she is to devote time, energy and resources intervening in a company’s affairs.

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Smooth Sailing
2 years ago

Smooth Sailing

By  •  Accounting

Investors are especially sensitive to cash-flow volatility in firms that rely heavily on external financing. This suggests that cash-flow volatility can directly affect firm investment policy through the cost of capital.

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Home Field Advantage
2 years ago

Home Field Advantage

By  •  Super Bowl

Advertising doesn’t just reach potential customers. It reaches potential investors, who tend to have a home bias – meaning they invest in what they know.

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Experiments In Short Selling
2 years ago

Experiments In Short Selling

By  •  Rethinking SEC Rules

Curbing short sales does indeed alter stock values. When curbs on short selling are removed, the price of overvalued stocks tends to drop. Loosening those rules leads to lower prices, which in turn prompt firms to alter investment and financing choices.

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Long-Term Partners
2 years ago

Long-Term Partners

By  •  Investment Banking

Before we relied on computers and the internet to learn, we based decisions on our fellow primates’ actions, narratives and visual cues. When the decisions are big, it seems our brains are still programmed this way, choosing to chew data over a business lunch in addition to compiling, analyzing and synthesizing it in two dimensions.

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The Costly Business Of Corruption
2 years ago

The Costly Business Of Corruption

By  •  Municipal Bonds

State corruption and political connections impede financial and economic development by increasing investment risk and bond interest payments and reducing access to high quality financial institutions. Specialized financial institutions allow issuers to purchase credit enhancements to remove corruption-induced risk from bond yields. Credit enhancements play an important role in alleviating the economic damage that corruption can cause.

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