This article examines the responses of the US Chamber of Commerce and state- and local-level chambers of commerce to Black Lives Matter (BLM). The US Chamber of Commerce's Equality of Opportunity Initiative stresses the business case for racial equity and the economic benefits that can be attained by overcoming race-related inequalities. Many chambers are adopting racially progressive positions, often at some cost to themselves. This article contributes a typology of stances and actions and draws on interviews with American business leaders to characterize American business organization responses to BLM. There is some movement beyond a progressive neoliberal vision of nondiscrimination to acknowledge that it is necessary to “level the playing field.” And the Diversity, Equity, and Inclusion (DEI) initiatives of state- and regional-level chambers suggest that they are making genuine and, in some cases, bold and meaningful attempts to advance the cause of racial equity. The evidence suggests that popular mobilization and social pressure following George Floyd's brutal murder played a critical role in enabling this progress. However, the parallels and similarities between current chamber and business DEI efforts and business stances in the tumultuous 1960s and 1970s raise the question: Can current efforts succeed where previous efforts have failed?

We construct a new numerical measure of earnings announcement surprises, standardized unexpected earnings call text (SUE.txt), that does not explicitly incorporate the reported earnings value. SUE.txt generates a text-based post-earnings-announcement drift (PEAD.txt) larger than the classic PEAD. The magnitude of PEAD.txt is considerable even in recent years when the classic PEAD is close to 0. We explore our text-based empirical model to show that the calls’ news content is about details behind the earnings number and the fundamentals of the firm.

We find that organization capital is negatively related to the cost of bank loans. This finding is robust to additional analyses including those that address omitted variable bias and reverse causality. In addition, we find that organization capital reduces all-in-spread-undrawn. When we decompose the bank loan cost, we find that organization capital increases facility fees due to its risk-engendering characteristics. Finally, we find that organization capital is positively associated with a high likelihood of the presence of inventors and innovation output, consistent with the argument that organization capital is embedded in the key talent within a firm.

Economically insignificant tick sizes encourage undercutting behavior, thus harming market quality. Theoretical work shows that increasing tick sizes in unconstrained markets reduces undercutting and improves market quality. Equity market pricing grids are generally too coarse to test this prediction. We examine a cryptocurrency market with infinitesimal tick sizes where undercutting limit orders acquire price priority without meaningful economic cost. We show that increasing tick sizes reduces undercutting behavior, increases liquidity provision and quoted depth, and reduces transaction costs for institutional and retail-sized trades while decreasing short-term volatility. Tiny tick sizes are suboptimal, supporting increased minimum trading increments in tick-unconstrained markets.

This article constructs and examines enhanced global return factors. I focus on three different enhancement approaches. First, I incorporate information about the covariance structure in the cross-section of stock returns. Second, I employ volatility-reducing techniques in the time series. Third, I exploit diversification benefits. I form six categorical factors by aggregating information from 214 characteristics. Further, I diversify across factors. The enhancement mechanisms are largely successful and when jointly applied increase the optimal Sharpe ratio on average by a factor of 1.96 compared to the traditional factors. My results point to the importance of employing efficient factors in asset pricing studies.

We study the role of state controlling shareholders in corporate payout policy. The State Capital Operation Program in China requires parent central state-owned enterprises (CSOEs) to contribute part of their consolidated income to a new fiscal fund. We find that listed CSOEs, partially controlled by parent CSOEs, experience significant reductions in dividend payouts as the income-contribution ratio increases. The dividend reductions are concurrent with increases in intragroup resource transfers—listed CSOEs’ loans to, and commercial trades with, group peers. The program yields adverse consequences for listed CSOEs’ investment and employment, yet being mitigated by group-level dividend reductions.

We examine how creditor rights affect the trade-off between non-debt and debt tax shields. Using four bankruptcy reforms and a panel of private and public firms from Italy, we show that laws empowering creditors reduce tax avoidance and increase debt financing, consistent with firms substituting non-debt tax shields with debt tax shields. We corroborate the validity of our findings using a panel of public firms across 33 countries. Additionally, we document that the impact of creditor protection laws is mitigated by tax system characteristics, which significantly reduce the incentives to substitute tax avoidance with debt.

Across the United States (US), farmworkers and their allies are mobilizing to encourage companies to join a Worker-driven Social Responsibility (WSR) program. On May Day, hundreds marched in support of Migrant Justice’s campaign to convince the Hannaford supermarket chain to join the Milk With Dignity program, a WSR program focused on working conditions in the dairy industry.1 At the most recent annual shareholder meeting of Wendy’s, a US-based fast food franchise, several members of the board of directors faced opposition to renewal of their positions in response to what some shareholders perceived as Wendy’s inadequate disclosure on its efforts to protect workers in its supply chain.2 The opposition forms part of a years-long campaign by the Coalition of Immokalee Workers and its allies to convince Wendy’s to join the Fair Food Program, the inaugural WSR program.3

Practitioners allocate substantial resources to technical analysis whereas academic theories of market efficiency rule out technical trading profitability. We study this long-standing puzzle by applying a diverse set of machine learning algorithms. The results show that an investor can find profitable technical trading rules using past prices, and that this out-of-sample profitability decreases through time, showing that markets have become more efficient over time. In addition, we find that the evolutionary genetic algorithm’s attitude in not shying away from erroneous predictions gives it an edge in building profitable strategies compared to the strict loss-minimization-focused machine learning algorithms.

Insiders must disclose indirect trades made through accounts they control, including family, trust, retirement, and foundation accounts. Indirect trades through these accounts are more profitable than direct trades in the insider’s own account. They are also more likely to be made by “opportunistic” insiders who make nonroutine trades, or who trade profitably before earnings announcements, or who have a short investment horizon. These trades contain more predictive information about earnings surprises and large price changes, and they tend to be made by insiders at firms with high information asymmetry. Insiders also make fewer indirect trades following periods of intense regulatory scrutiny.

We provide evidence of a network of information flow between activists and other investors prior to 13D filings. We match EDGAR search activity to investor IP addresses, identifying specific investors who persistently download information on an individual activist’s campaign targets in the days prior to that activist’s 13D disclosures. This outside investor’s knowledge of pending activist campaign plans seems to benefit both parties: the informed investor, unnamed in the 13D, increases its holdings in the targeted stock prior to the price surge upon 13D disclosure, while the activist earns voting support that increases their likelihood of pursuing and winning a proxy fight.

An assimilation bias occurs when people’s evaluative judgment is positively influenced by a previously observed signal. We study this effect by examining investors’ appraisal of M&A deals announced 1 day after other firms in the same 1-digit SIC as the merging parties release earnings surprises. Consistent with assimilation effects, acquirers’ M&A announcement stock return initially correlates with the previous day’s earnings surprises. This effect reverses after 1 week. Assimilation generates other distortions as more positive surprises are related to increases in bid competition, takeover premiums, and withdrawn M&As. Evidence from IPOs corroborates the presence of assimilation effects in financial markets.

The ongoing trade war between the United States and China represents one of the most severe deteriorations of trade cooperation in modern times. In this context, the ferocious trade rhetoric accusing China of breaking promises in trade policy is striking. A previously unexamined question in this context arises: How does this rhetoric shape individual attitudes toward bilateral trade cooperation? My analysis of original survey experiments from the United States and China (n = 4181) suggests that this type of rhetoric has important ramifications. Experimental evidence from both countries suggests that individuals react more strongly to rhetoric emphasizing negative than positive past behaviour of the trading partner. Overall, this pattern prevails independently of the identity of the trading partner. Promise-breaking trade narratives, a key contextual dimension of the US-China trade war, diminish the perceived level of trustworthiness of the other country. A conjoint analysis suggests that individuals’ trade cooperation attitudes are also shaped by rhetoric targeting issue areas beyond trade, such as military affairs and human rights. These findings highlight the importance of contextual factors accompanying the US-China trade war context. Thereby, this article emphasizes the potential for political elites to effectively leverage fundamental individual fairness principles for invigorating opposition to open trading relations.

This article offers the first extensive analysis of female agency in the marine insurance industry of early modern Europe. Drawing from a data set of more than four thousand insurance policies signed in the Royal Insurance Chamber in Paris between 1668 and 1672, the article studies the activities of Parisian women within the institution. These policies illustrate that women played a crucial role in the Chamber as underwriters, creditors, commission agents, and policyholders. Moreover, institutional papers and the records of the Parisian admiralty court reveal that women acted ably in defense of their interests when conflicts emerged, although there were limitations to their agency in the Chamber itself. In this way, the article challenges the long-standing perception that underwriting was an exclusively masculine activity in pre-modern Europe. Moreover, it sheds light on the role of women in supporting the maritime and colonial policies of Jean-Baptiste Colbert, Louis XIV’s eminent minister, thereby becoming underwriters of France’s early Atlantic Empire.

The ‘rivalry’ between India and China on the global stage is much ado about nothing. India and China both have huge potential to play a bigger role in global business than they do today. Both countries have experienced major growth domestically, which is not yet matched by their role in global business. MNEs from the two countries have been internationalizing along very different pathways, with few overlaps. Their ability to realize their potential depends on policies and institutions as well as entrepreneurial business leadership in their own country. Their future internationalization depends only to a small degree on the other of the two countries

In theory, financial markets promote innovation by selectively allocating capital to high-quality projects. In this article, I show that equity markets can also inhibit innovation. In public firms, I find that short-term equity market declines cause pharmaceutical companies to abandon early-stage drug developments, irrespective of drug quality or changes in a firm’s stock price. I show that financing constraints drive this behavior, highlighting that even short-term market fluctuations can have long-term effects on pharmaceutical innovation and prevent potentially life-saving drugs from progressing to the market.

Foreign multinational enterprises (MNEs) operating in China, especially during the nineteenth century, have attracted less interest from historians than Chinese firms and expatriate merchant houses. However, in this period, MNEs shaped advertising in Shenbao, China’s most vital modern Chinese-language newspaper. Through our examination of the advertisements they placed during the newspaper’s first phase of publication, 1872–1889, we argue that MNEs were more significant to the history of business in China than heretofore recognized. We contend that they influenced Chinese print media advertising by pioneering product differentiation and branding in this newspaper. They did so, we suggest, because this approach to marketing, which differed from those used by most other foreign and Chinese domestic advertisers, provided a competitive advantage to overcome their liability of foreignness, and was facilitated by their global reach in the form of knowledge flows from offshore bases to onshore branches.

Three common misconceptions persist about federal regulations. The first misconception is that most new regulations concern the environment, but in fact, only a small minority of regulatory flows are environmental. The second misconception is that regulators offer reasonable justifications and quantitative evidence for the majority of regulations. However, quantitative estimates rarely appear in published rules, negating the impression given by executive orders and Office of Management and Budget guidance, which require cost-benefit analysis (CBA) and clearly articulate sound economic principles for conducting CBA. Environmental rules have relatively higher-quality CBAs, at least by the standards of other federal rules. The third misconception, which is particularly relevant to the historic regulations promulgated during the COVID-19 pandemic, is that regulatory costs are primarily clerical, rather than opportunity or resource costs.