Managerial Career Concerns and Risk Management

We present a dynamic model of corporate risk management and managerial career concerns. We show that managers with high (low) career concerns are more likely to speculate (hedge) early in their careers. In the later stage of their careers when managers have less career concerns, there is no speculative motive for self interested managers. On the other hand, managers with minimal career concerns engage in neither hedging nor speculation early in their careers, but they may choose to hedge after poor early performance

Strategic trading against retail investors with disposition effects

In this paper, we study a model incorporating the retail trader\u27s reluctance to sell into losses. We show that in this setup the informed trader always buys the asset when he receives a favorable signal. However, when the informed trader receives an unfavorable signal, he may not always sell the asset if the signal is moderately bad and the retail trader is reluctant to realize losses. Hence the good news travels faster than the bad news and the asset price exhibits steady climbs with sharp and sudden drops

Strategic trading against retail investors with disposition effects

In this paper, we study a model incorporating the retail trader\u27s reluctance to sell into losses. We show that in this setup the informed trader always buys the asset when he receives a favorable signal. However, when the informed trader receives an unfavorable signal, he may not always sell the asset if the signal is moderately bad and the retail trader is reluctant to realize losses. Hence the good news travels faster than the bad news and the asset price exhibits steady climbs with sharp and sudden drops

The impact of the dividend tax cut and managerial stock holdings on corporate dividend policy

We examine the impact of the May 2003 dividend tax cut and managerial stock holdings on corporate dividend initiation decision. We find that managers who hold sizable stakes in their companies are more likely to initiate dividends following this tax cut. This positive relation is stronger for firms with higher growth opportunities. These results are consistent with the hypothesis that managers initiate dividends to maximize their own wealth. Moreover, the market reacts negatively (most positively) to dividend initiation announcements by firms with higher (lower) growth opportunities and higher (lower) managerial share holdings

The impact of the dividend tax cut and managerial stock holdings on corporate dividend policy

We examine the impact of the May 2003 dividend tax cut and managerial stock holdings on corporate dividend initiation decision. We find that managers who hold sizable stakes in their companies are more likely to initiate dividends following this tax cut. This positive relation is stronger for firms with higher growth opportunities. These results are consistent with the hypothesis that managers initiate dividends to maximize their own wealth. Moreover, the market reacts negatively (most positively) to dividend initiation announcements by firms with higher (lower) growth opportunities and higher (lower) managerial share holdings

The impact of the dividend tax cut and managerial stock holdings on corporate dividend policy

We examine the impact of the May 2003 dividend tax cut and managerial stock holdings on corporate dividend initiation. We find that executives who hold sizable stakes in their companies become more likely to initiate dividends following this tax cut. The firms that initiate dividends after the tax cut are more profitable than firms that initiate dividends before the tax cut. The market appears to recognize the managers' incentive change after the tax law change. Firms with higher managerial stock holdings receive lower abnormal returns from announcing dividend initiation.Dividend tax cut Managerial stock holdings Dividend initiation