Where is the Market? Evidence from Cross-Listings in the U.S.

We explore two main questions. First, can two markets for a company’s shares coexist and, if so, what determines the distribution of trading volume across them? For firms cross-listed in the U.S. we find that in most cases U.S. trading is a significant fraction of total volume, and tends to be larger for companies based in countries that are geographically close, with low financial development and poor anti-insider trading protection. Moreover, the relative size of the U.S. market is larger if the company is small, volatile and high-tech. Second, we ask whether developing an active foreign market entails lower domestic trading activity. We find that for firms based in developed markets, the domestic turnover rate increases in the wake of cross-listing and remains permanently higher. In contrast, emerging market firms tend to experience a decrease in domestic trading activity.trading volume, cross-listing, flow-back

Conflict of Interest, Bias, and Manipulation: Reassessing Prescriber Education and the Learned Intermediary Doctrine

The purpose of this essay is to explore how the pharmaceutical industry’s influence impacts the drug approval process and the resulting information provided by drug manufacturers to healthcare providers and ultimately to patients. For nearly half a century, United States courts have held under the Learned Intermediary Doctrine that the makers of prescription drugs are responsible for educating prescribers, not patients, about their products. The dialectic tension between corporate profits and required prescriber education calls into question the credibility of drug information from corporate, medical, and government sources. The key question to be addressed in this paper is, how credible is the information provided to prescribers by pharmaceutical manufacturers? Numerous critics have called into question the FDA’s ability to assure that medical drugs are safe and effective and the communication about them is accurate and unbiased. But the FDA is not the only healthcare organization that collaborates with the pharmaceutical industry and creates confusion and perpetuates deceptions. Medical schools accept money for clinical trials, provide researchers, and cooperate with pharmaceutical manufacturers much to the concern of numerous critics. In addition, clinical trials data, publications, and continuing education frequently lack credibility related to researcher/author bias and conflicts of interest. Unless the influence of the pharmaceutical industry on contemporary healthcare is markedly altered or eliminated, prescribers cannot rely on the information they are provided and therefore should not be held liable by the courts as learned intermediaries

Large capital infusions, investor reactions, and the return and risk performance of financial institutions over the business cycle and recent finanical crisis

The authors examine investors' reactions to announcements of large seasoned equity offerings (SEOs) by U.S. financial institutions (FIs) from 2000 to 2009. These offerings include market infusions as well as injections of government capital under the Troubled Asset Relief Program (TARP). The sample period covers both business cycle expansions and contractions, and the recent financial crisis. They present evidence on the factors affecting FI decisions to issue capital, the determinants of investor reactions, and post-SEO performance of issuers as well as a sample of matching FIs. The authors find that investors reacted negatively to the news of private market SEOs by FIs, both in the immediate term (e.g., the two days surrounding the announcement) and over the subsequent year, but positively to TARP injections. Reactions differed depending on the characteristics of the FIs, stage of the business cycle, and conditions of financial crisis. Larger institutions were less likely to have raised capital through market offerings during the period prior to TARP, and firms receiving a TARP injection tended to be larger than other issuers. The authors find that while TARP may have allowed FIs to increase their lending (as a share of assets) in the year after the issuance, they took on more credit risk to do so. They find no evidence that banks' capital adequacy increased after the capital injections.Securities ; Financial services industry ; Banks and banking