Do good governance provisions shelter investors from contagion?

This paper studies how the Russian crisis of 1998 affected listed firms in transition economies. The data cover 394 companies that were listed before the Russian crisis, and include financial, industry, ownership and stock market information. Results show that in the short term (within one month of the crisis) good governance did not shelter investors from contagion. On the contrary, stock returns during the crisis period were lower for the largest and most liquid stocks and markets in the region irrespective of their direct exposure to Russia. The paper also documents that in the longer term (one year after the crisis) recovery was faster in firms without direct trade exposure to Russia, as well as in firms with better firm-level governance as proxied by the presence of a foreign blockholder. The paper presents evidence that both firm- and country-level characteristics are important in overcoming the effects of a crisis. Firm-specific characteristics, however, play a bigger role for companies operating in countries with weaker corporate governance. Copyright (c) 2007 The Author Journal compilation (c) 2007 The European Bank for Reconstruction and Development .

The effect of short-term information on long-term investment: An experimental study

We present a multi-trial experiment that extends the classic experiment of Thaler etal. (1997) by adding short-term information to long-term investment. The allocation to the risky asset is reduced in the long-term, when we add short-term information. © 2012 Elsevier B.V