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Full-Text Articles in Corporate Finance
The Effect Of Innovation Performance On The Pricing In Private Placement, Tong Liu
The Effect Of Innovation Performance On The Pricing In Private Placement, Tong Liu
Undergraduate Student Research Internships Conference
We propose a research project examining the effect of firms’ innovation performance in the pricing of private equity placements, namely private investments in public equity (PIPEs). We investigate whether firms’ previous innovation outputs have been considered in the PIPE issuance. Innovative activities are important for firms to gain strategic advantage against their competitors. Firms with innovative opportunities frequently lack capital. However, financing innovation tends to be more difficult due to the uncertainty and information asymmetry (Acharya and Xu, 2017). Compared to public firms, private firms have the limitations to access the broader investor pool and higher cost of capital. Unlike …
Analyst Talent, Information, And Investment Strategies, Zhichuan Li, Stephen R. Foerster, Zhenyang Tang, Chongyu Dang
Analyst Talent, Information, And Investment Strategies, Zhichuan Li, Stephen R. Foerster, Zhenyang Tang, Chongyu Dang
Business Publications
Analyst talent, rather than the number of analysts following a firm, matters most to investors. We find: 1) Analysts with greater “natural” forecasting talent—controlling for experience, brokerage affiliation, and task complexity—contribute relatively more firm-specific rather than industry or market information; 2) Earnings forecasts by low-talent analysts may lead to substantial mispricing; 3) When earnings surprises are large, post-earnings-announcement drift is more prominent among firms covered by low-talent analysts; 4) Firms with low-talent analysts have significantly more insider trading prior to positive earnings news; and 5) Investing following insider trading is more profitable in stocks followed by low-talent analysts.
Managerial Attributes, Incentives, And Performance, Zhichuan Li, Jeffrey L. Coles
Managerial Attributes, Incentives, And Performance, Zhichuan Li, Jeffrey L. Coles
Business Publications
We examine the relative importance of observed and unobserved firm- and manager-specific heterogeneities in determining executive compensation incentives and firm policy, risk, and performance. First, we decompose executive incentives into time-variant and time-invariant firm and manager components. Manager fixed effects supply 73% (60%) of explained variation in delta (vega). Second, controlling for manager fixed effects alters parameter estimates and corresponding inference on observed firm and manager characteristics. Third, larger CEO delta (vega) fixed effects predict better firm performance (riskier corporate policies and higher firm risk). These results suggest that the delta (vega) fixed effect captures managerial ability (risk aversion).
The Effect Of Corporate Visibility On Corporate Social Responsibility, Zhichuan Li, Taylor Morris, Brian Young
The Effect Of Corporate Visibility On Corporate Social Responsibility, Zhichuan Li, Taylor Morris, Brian Young
Business Publications
Outside of direct ownership, the general public may feel it is an implicit stakeholder of a firm. As the public becomes more vested in a firm’s actions, the firm may be more likely to engage in Corporate Social Responsibility (CSR) activities. We proxy for the public’s stake in a firm with public visibility. Based on 3,400 unique newspaper publications from 1994 to 2008, we measure visibility for the U.S. S&P 500 firms with the frequency of print articles per year concerning the firm. We find that visibility has a signficant, positive relationship with the CSR rating. Evidence also suggests this …
Measuring Firm Size In Empirical Corporate Finance, Zhichuan Li, Chongyu Dang, Chen Yang
Measuring Firm Size In Empirical Corporate Finance, Zhichuan Li, Chongyu Dang, Chen Yang
Business Publications
In empirical corporate finance, firm size is commonly used as an important, fundamental firm characteristic. However, no research comprehensively assesses the sensitivity of empirical results in corporate finance to different measures of firm size. This paper fills this hole by providing empirical evidence for a “measurement effect” in the “size effect”. In particular, we examine the influences of employing different proxies (total assets, total sales, and market capitalization) of firm size in 20 prominent areas in empirical corporate finance research. We highlight several empirical implications. First, in most areas of corporate finance the coefficients of firm size measures are robust …