every little helps esg news and stock market reaction stories about corporate social responsibility have become very frequent over the past decade and managers can no longer ignore their impact on firm value in this paper we investigate the extent and the determinants of the stock market s reaction following ordinary news related to environmental social and governance issues the so called esg factors to that purpose we use an original database provided by covalence ethicalquote our empirical analysis is based on about 33 000 esg news positive or negative targeting one hundred listed companies over the period 2002 2010 on average firms facing negative events experience a drop in their market value of 0 1 whereas companies gain nothing on average from positive announcements we find also that market participants are responsive to the media but they do not react to firms press releases or to ngos disclosures moreover our results indicate that sector s reputation mitigates the loss the goodwill hypothesis and that cultural proximity and lexical contents of esg disclosures play a significant role in the magnitude of the impact

market wide attention trading and stock returns abstract market wide attention grabbing events record levels for the dow and front page articles about the stock market predict the trading behavior of investors and in turn market returns both aggregate and household level data reveal that high market wide attention events lead investors to sell their stock holdings dramatically when the level of the stock market is high such aggressive selling has a negative impact on market prices reducing market returns by 19 basis points on days following attention grabbing events

wisdom of crowds the value of stock opinions transmitted through social media social media has become a popular venue for individuals to share the results of their own analysis on financial securities this paper investigates the extent to which investor opinions transmitted through social media predict future stock returns and earnings surprises we conduct textual analysis of articles published on one of the most popular social media platforms for investors in the united states we also consider the readers perspective as inferred via commentaries written in response to these articles we find that the views expressed in both articles and commentaries predict future stock returns and earnings surprises

growth forecasts belief manipulation and capital markets abstract we analyze how a benevolent privately informed government agency would optimally release information about the economy s growth rate when the agents hold heterogeneous beliefs we model two types of agent conforming and dissenting the former has a prior that is identical to that of the government agency whereas the latter has a prior that differs from that of the government agency we identify both informative and uninformative equilibria informative equilibria are equilibria in which the government agency s equilibrium signal leads to a revision of beliefs we demonstrate that the uninformative equilibria can in fact dominate the informative ones in terms of ex post social welfare

industry window dressing we explore a new mechanism by which investors take correlated shortcuts and present evidence that managers using sales management take advantage of these shortcuts specifically we exploit a regulatory provision wherein a firm s primary industry is determined by the highest sales segment exploiting this regulation we provide evidence that investors classify operationally nearly identical firms as starkly different depending on their placement around this sales cutoff moreover managers appear to exploit this by manipulating sales to be just over the cutoff in favorable industries further evidence suggests that managers engage in activities to realize large tangible benefits from this opportunistic action

intra industry foreign direct investment we use a new firm level data set that establishes the location ownership and activity of 650 000 multinational subsidiaries close to a comprehensive picture of global multinational activity a number of patterns emerge from the data most foreign direct investment fdi occurs between rich countries the share of vertical fdi subsidiaries which provide inputs to their parent firms is larger than commonly thought even within developed countries more than half of all vertical subsidiaries are only observable at the four digit level because the inputs they are supplying are so proximate to their parent firms final good that they appear identical at the two digit level we call these proximate subsidiaries intra industry vertical fdi and find that their location and activity are significantly different to the inter industry vertical fdi visible at the two digit level these subsidiaries are not readily explained by the comparative advantage considerations in traditional models where firms locate their low skill production stages abroad in low skill countries to take advantage of factor cost differences we find that overwhelmingly multinationals tend to own the stages of production proximate to their final production giving rise to a class of high skill intra industry vertical fdi

would developing country commitments affect us households support for a modified kyoto protocol abstract would us households be willing to pay more to support a modified kyoto protocol mkp if developing countries had binding future limits on greenhouse gas production we explore this question using data from a unique set of national internet samples and web based surveys using an advisory referendum format the contingent valuation method is applied to estimate annual household willingness to pay wtp for us senate ratification of the kyoto protocol for a split sample treatment the basic kyoto protocol bkp control group versus a mkp that includes limits on future greenhouse gas production for major developing countries treatment group the results indicate that the treatment significantly increases the probability of a yes vote on the advisory referendum econometric modeling results provide evidence that the mkp significantly increases us households median wtp to support the treaty

how the market values greenwashing evidence from china in china many firms advertise that they follow environmentally friendly practices to cover their true activities a practice called greenwashing which can cause the public to doubt the sincerity of greenization messages in this study i investigate how the market values greenwashing and further examine whether corporate environmental performance can explain different and asymmetric market reactions to environmentally friendly and unfriendly firms using a sample from the chinese stock market i provide strong evidence to show that greenwashing is significantly negatively associated with cumulative abnormal returns car around the exposure of greenwashing in addition corporate environmental performance is significantly positively associated with car around the exposure of greenwashing furthermore my findings suggest that corporate environmental performance has two distinct effects on car around the exposure of greenwashing the competitive effect for environmentally friendly firms and the contagious effect for potential environmental wrongdoers respectively the results are robust to various sensitivity tests

treatment of don t know responses in contingent valuation surveys a random valuation model abstract this paper provides a utility theoretic interpretation of don t know dk responses in contingent valuation surveys using a referendum elicitation procedure the random valuation model in this paper assumes that each respondent of a contingent valuation survey has an implicit valuation distribution rather than a single true value as traditionally assumed in his her mind if an offered referendum bid is not clearly different from the mean value of one s valuation distribution the respondent may give a dk answer to the cv referendum question based on this model a maximum likelihood procedure is proposed for estimating respondents willingness to pay for a nonmarket good with referendum contingent valuation data which include dk responses an empirical illustration of this estimation procedure is also provided

should we pay attention to investor attention in forex futures market we investigate whether forex futures dynamics is responsive to change in investor attention the currencies used in the study are the aud australian dollar cad canadian dollar eur euro gbp

financial contagion and attention allocation this paper explains financial contagion between two stock markets with uncorrelated fundamentals by fluctuations in international investors attention allocation we model the process of attention allocation that underlies portfolio investment in international markets using investors who face information processing constraints investors optimally allocate more attention to a region hit by a financial crisis to the detriment of other markets the resulting endogenous increase in uncertainty causes a reduction in the capacity to bear risks by international investors that induces them to liquidate their positions in all risky assets hence there is a collapse in stock prices around the world we show that the degree of non anticipation of a crisis is crucial for the existence of contagion using data from the east asian crisis and the number of news stories about thailand in the financial times relative to news stories about argentina brazil and chile as a proxy for the relative attention allocated to the asian stock market we find evidence consistent with two key predictions of our model first the higher the volatility of the originator market the more relative attention allocated to this market and second the more relative attention allocated to the originator market the higher the volatility of the other markets our findings support the attention reallocation channel as a transmission mechanism of financial crises between regions during the period from january 1997 to july 1998

does don t know mean no analysis of don t know responses in dichotomous choice contingent valuation questions the don t know response option in contingent valuation dichotomous choice questions is analysed using data from both willingness to pay and willingness to accept studies an empirical analysis is conducted to determine whether respondents are stating a response similar to yes or no responses or a middle response it is found that don t know responses are similar to no responses in the willingness to pay study in the willingness to accept study it is found that the don t know responses are similar to a middle response it is further suggested that researchers consider calculating ambivalence bounds when a don t know response is a middle response

no news is news do markets underreact to nothing as illustrated in the tale of the dog that did not bark the absence of news and the passage of time often contain information we test whether markets fully incorporate this information using the empirical context of mergers during the year after merger announcement the passage of time is informative about the probability that the merger will ultimately complete we show that the variation in hazard rates of completion after announcement strongly predicts returns this pattern is consistent with a behavioral model of underreaction to the passage of time and cannot be explained by changes in risk or frictions

learning about unstable publicly unobservable payoffs neoclassical finance assumes that investors are bayesian in many realistic situations bayesian learning is challenging here we consider investment opportunities that change randomly while payoffs are observable only when invested in a stylized version of the task we wondered whether performance would be affected if one were to follow reinforcement learning principles instead the answer is a definite yes when asked to perform our task participants overwhelmingly learned in a bayesian way they stopped being bayesians though when not nudged into paying attention to contingency shifts this raises an issue for financial markets who has the incentive to nudge investors

individual investor s limited attention and ipo performance the paper models and verifies the spread and decay of investor s attention before listing on the stock market by using the baidu index as a proxy for investor attention of the frequency of searches

yea saying in contingent valuation surveys a number of recent papers have provided estimates of willingness to pay derived in contingent valuation surveys exceeding those revealed in experimental or real life markets one possible explanation for the overestimation of values is the presence of yea saying with the objective of reducing the occurrence of yea saying a new elicitation format referred to as the dissonance minimizing d m format is proposed an empirical comparison of the dm format with the conventional dichotomous choice dc format and the ambivalence reducing polychotomous choice pc format suggested by ready whitehead and blomquist 1995 is made results are encouraging for the dm

investor attention overconfidence and category learning abstract motivated by psychological evidence that attention is a scarce cognitive resource we model investors attention allocation in learning and study the effects of this on asset price dynamics we show that limited investor attention leads to category learning behavior i e investors tend to process more market and sector wide information than firm specific information this endogenous structure of information when combined with investor overconfidence generates important features observed in return comovement that are otherwise difficult to explain with standard rational expectations models our model also demonstrates new cross sectional implications for return predictability

using contingent valuation to value a noxious weeds control program the effects of including an unsure response category the national oceanic and atmospheric administration contingent valuation panel recommended that a response category be included along with the vote in favor and vote against options associated with a referendum contingent valuation question that allows individuals to express lack of a well defined opinion however the recommendation did not include guidance on how to analyze such responses in this article we describe the results of a carefully designed split sample experiment that allowed for comparison of a standard dichotomous choice referendum treatment to a treatment that included the option of responding unsure to the contingent valuation question in addition to the standard vote in favor and vote against response categories we are able to examine several options for dealing with the unsure responses and conclude that the unsure responses should be included in the value estimation as the respondents who choose this response category are distinct from respondents who choose the vote in favor and vote against response categories

the complex integration strategies of multinationals and cross country dependencies in the structure of foreign direct investment abstract the behavior of many multinational enterprises is not well described by existing models of foreign direct investment fdi firms often follow strategies that involve vertical integration in some countries and horizontal integration in others a strategy known as complex integration this paper presents a three country model that is used to analyze why firms might follow a strategy of complex integration my analysis reveals that complex integration strategies create complementarities between potential host countries that have important implications for the structure of fdi the analysis also shows that falling transport cost between countries may increase the importance of complex integration strategies

the role of media in the credit crunch the case of the banking sector using a vector autoregression framework this paper investigates the dynamic relationship between the intensity of negative media speculation and the market performance of financial institutions evidence is provided that over the sub prime crisis period pessimistic coverage granger caused the returns on banking indices while causality in the opposite direction proved weaker these findings may imply that journalists not only report on the state of economic reality but also play an active role in creating it investors acting upon sentiment implicit in media reports would have been able to improve their investment performance as measured by sharpe ratios and jensen s alphas

interdependence in multinational production networks the majority of multinational firms today operate a multilateral production network most existing empirical analyses have however focused on firms choice between producing at home and investing overseas and assumed that a firm s decision to invest in a foreign country is independent of its locations in third countries this paper examines the effect of existing production network on multinationals entry decision using detailed french multinational subsidiary level data the paper finds strong evidence of horizontal and vertical interdependence across multinationals foreign production locations there is however little evidence of horizontal interdependence between home country production and foreign investment when the third country effects are taken into account constituting a sharp contrast to the conventional emphasis this result is robust to the various specifications and sensitivity analyses undertaken in the paper and highlights the importance of investigating the causes and effects of foreign direct investment in the context of multinational production network

the impact of fraudulent false information on equity values there are two types of stock price manipulation examined in the theoretical literature 1 insider trading which involves private information that is true and 2 the public spreading of fraudulent false information while there is a large empirical literature on insider trading this is the first empirical article to examine the impact of false fraudulent public information on stock prices and trading volume we find that such false information even after being denied by a credible source such as the sec generates both abnormal returns and abnormal trading volume we also find that the effects of the false information on security returns and volume can be persistent for at least 2 weeks in addition we show that perpetrators of false news attacks can make potentially large profits from such market manipulations

quantity restrictions on advertising commercial media bias and welfare abstract we study the welfare effect of a quantity restriction on advertising in free to air television and other advertising financed media in the presence of commercial media bias broadcasters face a trade off between increasing the number of viewers by sending content that is highly valued by viewers and increasing the price of advertising by choosing advertiser friendly content a cap on advertising drives the per viewer price of ads up thus content improves for viewers therefore the cap can be welfare enhancing even when viewers are not ad averse competition among broadcasters makes it more likely that a cap on advertising improves welfare thus there is a complementarity between regulation and competition on this market we also show that a tax on advertising revenues has quite different effects than a cap on advertising quantity

the bidder s curse traditional explanations for the popularity of auctions are efficiency and revenue maximization we argue that another reason is the potential for overbidding i e buyers bidding above their willingness to pay outside the auction the auction mechanism ensures that even if only few buyers overbid they affect prices and allocations we employ a novel approach to identify overbidding in the field comparing auction prices to simultaneous fixed prices for identical items on the same ebay webpage we argue that fixed prices provide an upper bound for auction bids in a detailed data set of board game auctions we find that the final price exceeds the simultaneous fixed price in 42 percent of the auctions the result is not explained by differences in item quality shipping costs or seller reputation prior auction experience does not eliminate overbidding the finding replicates in a second broad data set of a cross section of auctions 48 percent overbidding the substantial fraction of overbid auctions is induced by a small number of bidders only 17 percent ever bid above the fixed price using a simple model of second price auctions with alternative fixed prices we show that transaction costs of switching between auctions and fixed prices cannot explain the results given that even the expected auction price is higher than the fixed price consistent with limited attention the closer the fixed price is listed relative to an auction the less likely are overbids this effect is strongest for bidders first bids when they are likely to examine the auction and fixed price listings more closely

much ado about two reconsidering retransformation and the two part model in health econometrics in health economics applications involving outcomes y and covariates x it is often the case that the central inferential problems of interest involve e y x and its associated partial effects or elasticities many such outcomes have two fundamental statistical properties y 0 and the outcome y 0 is observed with sufficient frequency that the zeros cannot be ignored econometrically this paper 1 describes circumstances where the standard two part model with homoskedastic retransformation will fail to provide consistent inferences about important policy parameters and 2 demonstrates some alternative approaches that are likely to prove helpful in applications

contagious speculation and a cure for cancer a nonevent that made stock prices soar a sunday new york times article on a potential development of new cancer curing drugs caused entremed s stock price to rise from 12 063 at the friday close to open at 85 and close near 52 on monday it closed above 30 in the three following weeks the enthusiasm spilled over to other biotechnology stocks the potential breakthrough in cancer research already had been reported however in the journal nature and in various popular newspapers including the times more than five months earlier thus enthusiastic public attention induced a permanent rise in share prices even though no genuinely new information had been presented a central tenet of f inancial economics is that an asset should trade at the risk adjusted present value of its expected future cash f lows these expected future cash f lows exist in people s minds and do not normally lend themselves to direct observation an equilibrium price in a frictionless market does not tolerate disagreements among market participants if some people deem the price too low they will buy the asset if others think it is too high they will sell it short if necessary although the efficient markets hypothesis predicts that price changes are unpredictable it associates them with changes in traders beliefs about future cash f lows or the appropriate discount rate beliefs change with the arrival of new information thus in hindsight at least we should be able to ascribe price changes to the arrival of specific new information we examine this view in the context of a series of news reports in the media pertaining to entremed enmd a biotechnology company and other members of its sector the sunday may 3 1998 edition of the new york times reports on a recent breakthrough in cancer research and mentions enmd a company with licensing rights to the breakthrough kolata 1998 the story s impact on the stock prices was immediate huge and to a large extent permanent the new news content of the times story was nil though the substance of the story had been published as a scientific piece in nature boehm et al 1997 and in the popular press including the times itself wade 1997 more than five months earlier in november 1997

a meta analysis of contingent valuation forest studies abstract forest ecosystems provide a variety of valuable goods and services this paper presents a meta analysis of forest studies using the contingent valuation cv method to value the provision of forest values around the world in this meta analysis we estimate the marginal value of different management programs that provide a variety of forest goods and services our results show that willingness to pay wtp estimates for forest management programs are sensitive to the program s objectives particularly when linked to the provision of recreational services other variables such as the type of forest location survey mode or the type of respondent were also found to significantly affect the wtp estimates

investor attention and market microstructure this paper develops the first economic model to study the impact of investor attention on the market microstructure in the kyle s 1985 setup our model strongly supports the empirical observation that higher investor attention leads to higher stock market volatility the first special case with one fully and one limited attentive traders explains that higher attention leads to higher trading intensity of retail investors market liquidity and stock market volatility the second special case with one fully inattentive and one limited attentive traders explains how investor attention affects buying and selling

does question format matter valuing an endangered species a three way treatment design is used to compare contingent valuation response formats respondents are asked to value an endangered species the red cockaded woodpecker and the restor ation of its habitat following a natural disaster for three question formats open ended payment card and double bounded dichotomous choice differences in survey response rates item non response rates and protest bids are examined bootstrap techniques are used to compare means across formats and to explore differences in willingness to pay wtp distribution functions convergent validity is found in a comparison of mean wtp values although some differences are apparent in the cumulat ive distribution functions differences across formats are also identified in item non response rates and proportion of protest bids overall the payment card format exhibits desirable properties relative to the other two formats

multinationals multi plant economies and the gains from trade a general equilibrium model of a multinational enterprise based on economies of multi plant operation is developed these economies are modelled as arising from the existence of a joint input whose productivity in each production facility is independent of the number of facilities maintained by a firm the multinational thus offers the world increased technical efficiency by eliminating the duplication of the joint input that would occur with independent national firms since this technical efficiency may come at the expense of increased market power the full determinants of home country host country and world welfare are considered

good day sunshine stock returns and the weather psychological evidence and casual intuition predict that sunny weather is associated with upbeat mood this paper examines the relationship between morning sunshine in the city of a country s leading stock exchange and daily market index returns across 26 countries from 1982 to 1997 sunshine is strongly significantly correlated with stock returns after controlling for sunshine rain and snow are unrelated to returns substantial use of weather based strategies was optimal for a trader with very low transactions costs however because these strategies involve frequent trades fairly modest costs eliminate the gains these findings are difficult to reconcile with fully rational price setting

the role of question format for the support for national climate change mitigation policies in germany and the determinants of wtp this contingent valuation survey examines the willingness to pay wtp for climate change mitigation in germany willingness to pay is assessed by using a classic dichotomous choice referendum format and a two way payment ladder in a split sample design we find that mean wtp under the referendum format is more than twice the wtp in the payment ladder format but median wtp does not differ moreover we test the possible effect of different determinants on wtp determinants that considerably influence wtp are personal norm climate change scepticism agreement with the german renewable energy law and individualistic cognition income and gender are also important predictors

valuing health care using willingness to pay a comparison of the payment card and dichotomous choice methods this paper compares willingness to pay wtp estimates generated from the dichotomous choice dc and payment card pc approaches in a split sample wtp experiment concerned with allocating scarce health care resources across three health care interventions the dc approach is shown consistently to generate larger welfare estimates than the pc observed difference between pc and dc experiments cannot be explained by the inclusion of non demanders or methods of statistical analysis but may be partly explained by yea saying no evidence of range bias or mid point bias was found with pc responses data were also collected on respondents ordinal rankings of the three interventions and person trade offs ptos neither of these approaches converged with wtp future work must address the decision heuristics individuals employ when responding to valuation experiments

soda wars the effect of a soda tax election on university beverage sales author s taylor rlc kaplan s villas boas sb jung k abstract 2019 western economic association international we examine how soda sales changed due to the campaign attention and election outcome of a local excise tax on sugar sweetened beverages using panel data of beverage sales from university retailers in berkeley california we estimate that soda purchases relative to control beverages significantly dropped immediately after the election months before the tax was implemented in the city of berkeley or on campus supplemental scanner data from off campus retailers reveal this result is not unique to the university setting our findings suggest soda tax media coverage and election outcomes can have larger effects on purchasing behavior than the tax itself jel d12 h20 c23 i38 q18

how important is the financial media in global markets this article studies differences in the information content of 870 000 news announcements in 56 markets around the world in most developed markets a firm s stock price moves much more on days with public news about the firm in contrast in many emerging markets volatility is similar on news and non news days we examine several hypotheses for our findings cross country differences in stock price reactions are best explained by insider trading followed by differences in the quality of the news dissemination mechanism our findings are useful for quantifying the extent of insider trading and how the financial media affects international markets jel g14 g15 public news announcements are a major mechanism for disseminating information to investors each day the financial media releases thousands of articles covering companies in markets worldwide investors use this news to estimate assets fundamental values despite the perceived importance of the

referendum design and contingent valuation the noaa panel s no vote recommendation this paper considers the effects for offering a would not vote option in contingent valuation cv questions framed using the referendum format this approach arises from a suggestion made by the national oceanic and atmospheric administration s noaa panel on contingent valuation the noaa panel was asked to evaluate the use of this method for estimating the economic value of nonmarketed environmental resources in the context of natural resource damage assessments this test used the cv questionnaire developed for the study of the exxon valdez oil spill conducted by the state of alaska with in person interviews the findings suggest that when those selecting the would not vote response are treated as having voted against the program a conservative coding offering this option does not alter 1 the distribution of for and against responses 2 the estimates of willingness to pay derived from these choices or 3 the construct validity of the results

does economic integration cause foreign direct investment the authors analyze the effect of economic integration on oligopolists international trade and foreign direct investment activities using a three country three firm model increased country size leads to dispersed foreign direct investment while improved market accessibility leads to export platform foreign direct investment increased intraregional market accessibility prompts outside firms to invest in the regional bloc reducing product prices profits of intrabloc firms and increasing total surplus integrating economies are more likely to gain from improving intraregional market accessibility than from tougher external trade policy and may wish to offer investment incentives to encourage foreign direct investment by outside firms copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

market madness the case of mad money we use the popular television show mad money hosted by jim cramer to test theories of attention and limits to arbitrage stock recommendations on mad money constitute attention shocks to a large audience of individual traders we find that stock recommendations lead to large overnight returns that subsequently reverse over the next few months the spike reversal pattern is strongest among small illiquid stocks that are hard to arbitrage using daily nielsen ratings as a direct measure of attention we find that the overnight return is strongest when high income viewership is high we also find weak price effects among sell recommendations taken together the evidence supports the retail attention hypothesis of barber and odean barber b t odean 2008 all that glitters the effect of attention and news on the buying behavior of individual and institutional investors rev financial stud 21 2 785 818 and illustrates the potential role of media in generating mispricing this paper was accepted by brad barber teck ho and terrance odean special issue editors

what determines urban households willingness to pay for co2 emission reductions in turkey a contingent valuation survey abstract this paper explores turkish urban households willingness to pay wtp for co2 emission reductions expected to result from improvements in power production a face to face questionnaire with a contingent valuation cv module prepared using the double bounded dichotomous choice elicitation framework was administered to 2422 respondents representative of urban turkey a developing country with low but rapidly increasing greenhouse gas emissions the determinants of wtp were identified by considering not only the impact of standard socio economic factors but also the effects of environmental knowledge attitudes and behaviour the relevance of the identity of the collection agent national versus international institutions in terms of trust people have towards them and the degree of perceived participation of others in the realization of the project our study confirms the existing literature in demonstrating that wtp figures reported by young and educated people that are active on environmental issues and who also possess material security and environmental knowledge are more likely to be high however their willingness to make contributions is hampered significantly by their belief that their fellow citizens will not contribute and the general lack of trust in institutions overall this study may be taken as a call to eliminate governance related uncertainties in climate change deals

discussion of earnings announcement promotions a yahoo finance field experiment abstract lawrence et al run a field experiment on yahoo finance which randomly promotes some earnings stories they find that firms in promoted stories have higher contemporaneous returns i begin by reviewing the media and finance literature and discuss the difficulty in solving the identification problem lawrence et al wish to solve i then discuss how their results fit with existing theories of attention and suggest some changes that could help pin down which theory best explains the results finally i discuss possible directions for future research i would like to thank john core editor and participants at the 2017 journal of accounting and economics conference for their comments and suggestions all errors here are my own

information and effort in contingent valuation surveys application to global climate change using national internet samples this contingent valuation study investigates the issues of information access and respondent effort and is based on a series of national internet samples the focus is on a split sample treatment basic information bi versus enhanced information ei in the latter significantly expanded information is provided about global climate change and the kyoto protocol using a referendum format we compare the treatment effect bi versus ei on willingness to pay wtp we develop measures of respondent effort in accessing optional information through the technology of web based surveys and jointly model effort and wtp using a simultaneous estimation approach results support the use of the joint modeling approach for objective measures of respondent effort and wtp respondent effort is shown to be positively and significantly related to wtp however use of the optional menu is rather modest counts of pages and time spent and is highly variable both across pages and respondents

dichotomous choice contingent valuation with dont know responses and misreporting a new approach is presented that simultaneously deals with misreporting and don t know dk responses within a dichotomous choice contingent valuation framework utilising a modification of the standard bayesian probit framework a gibbs with metropolis hastings algorithm is used to estimate the posterior densities for the parameters of interest several model specifications are applied to two contingent valuation datasets one on wolf management plans and one on the us fee demonstration program we find that dks are more likely to be from people who would be predicted to have positive utility for the bid therefore a dk is more likely to be a yes than a no we also find evidence of misreporting primarily in favour of the no option the inclusion of dk responses has an unpredictable impact on willingness to pay estimates since it impacts differently on the results for the two datasets we examine copyright c 2009 john wiley sons ltd

regional economic integration and geographic concentration of multinational firms abstract a number of theoretical studies have predicted that preferential trade agreements ptas raise outside multinationals incentive to invest in the participating countries especially in those that are integrated with larger markets and have lower production costs the hypothesis has however not been tested empirically this paper addresses the issue by estimating the impact of ptas on countries ability to attract multinationals the evidence is broadly consistent with expectations the formation of ptas leads to an increase in fdi by outside multinationals but the effect varies sharply with the size of integrated markets and countries comparative advantage countries integrated with larger markets experience a greater increase in total and export platform fdi those with a higher labor endowment also attract more fdi especially in labor intensive industries but at the expense of their labor scarce pta partners

opec in the news abstract this paper introduces a newspaper article count index related to opec that rises in response to important opec meetings and events connected with opec production levels i use this index to measure how interest in opec varies over time and investigate how oil price volatility behaves when the index unexpectedly changes i find that unexpected increases in the newspaper index are strongly associated with higher levels of oil price volatility both realized and implied in some cases these unexpected movements appear to be driven by an unpredictable opec event such as the iraq invasion of kuwait in other cases such as the oil price collapses in late 2008 and late 2014 unforeseen developments in the oil market or broader economy seem to generate the unexpected movements in price volatility and interest in opec the newspaper index is highly correlated with google search volume data on opec an alternative measure of the amount of attention paid to opec events

fdi in space spatial autoregressive relationships in foreign direct investment abstract there are a number of theoretical reasons why foreign direct investment fdi into a host country may depend on the fdi in proximate countries such spatial interdependence has been largely ignored by the empirical fdi literature with only a couple recent papers accounting for such issues in their estimation this paper conducts a general examination of spatial interactions in empirical fdi models using data on us outbound fdi activity we find that estimated relationships of traditional determinants of fdi are surprisingly robust to inclusion of terms to capture spatial interdependence even though such interdependence is estimated to be significant however we find that both the traditional determinants of fdi and the estimated spatial interdependence are quite sensitive to the sample of countries one examines

diversification cost structure and the risk premium of multinational corporations we investigate theoretically and empirically the relationship between the geographic structure of a multinational corporation and its risk premium our structural model suggests two channels on the one hand multinational activity offers diversification benefits risk premia should be higher for firms operating in countries where shocks co vary more with the domestic ones second hysteresis and potential losses induced by fixed and sunk costs of production imply that risk premia should be higher for firms operating in countries where is costlier to enter our empirical analysis confirms these predictions and delivers a decomposition of firm level risk premia into indi

measuring the interdependence of multinational firms foreign investments earlier work found evidence for geographic linkages of aggregate foreign direct investment across countries and country pairs from a theoretical point of view such linkages at the macroeconomic level may root in between firm as well as within firm linkages and originate from information spillovers across or within firms in exploring unknown markets and vertical linkages between production plants across different locations within the firm we use data on the universe of german multinational enterprises mnes to empirically explore how marginal investments at one foreign affiliate depend on investments at other affiliates within the same mne the empirical approach employs two channels or modes of cross affiliate interdependence mere geography capturing horizontal linkages through correlated learning and horizontal competition within the firm and input output relationships within or across industries which capture vertical linkages adding to earlier findings at the aggregate level we find evidence of a significant interdependence of investments within the firm in the firm level data at hand vertical linkages appear to be more important than horizontal ones investments at one location tend to stimulate investments at other locations of the same mne particularly if input linkages are strong the opposite seems to be true for output linkages beyond vertical linkages mere geographic proximity matters only to a minor extent this suggests that evidence of linkages through geographic closeness at aggregate data levels accrue mainly to reasons of vertical linkages within networks of affiliates jel c31 d22 f21 f23 f68 g31 h32

expected willingness to pay for wind energy in atlantic canada abstract we investigate the demand side of wind energy in three provinces in atlantic canada including new brunswick nova scotia and prince edward island empirical questions addressed include i what are the determinants of the probability of paying a non zero premium for electricity generated using wind technology ii given participation what drives how much more households are willing to pay a month and what is the monthly premium or expected willingness to pay wtp and iii is there heterogeneity in the expected wtp the study design follows the contingent valuation framework and the survey questionnaire follows a payment scale format reducing the starting point bias and reduces the incidence of item non response the data is from a stratified random sample we employ two stage models cragg s hurdle and the two part econometric models in the analysis scope and 0 wtp effects are explicitly explored we find that the overall probability of participation is 0 73 university education income residential property ownership concerns about the presence of wind turbines in neighborhoods and externality affect the likelihood of participation households are willing to pay 14 more per month in energy bill for wind power there is evidence of scope sensitivity the results provide insights on what proportion of the population will participate and how much more they are willing to pay for wind energy

earnings announcements and attention constraints the role of market design abstract we identify a new channel market makers attention constraints through which earnings announcements for one stock affect the liquidity of other stocks when some stocks handled by a designated market maker have earnings announcements liquidity is lower for non announcement stocks handled by the same market maker with the largest effects coming from earnings surprises and stocks with high earnings response coefficients half of the liquidity decline reflects attention constraints binding on the individual market maker and the other half is explained by the market maker s inventory we further find that a market design change that increases automation alleviates the liquidity effect of attention constraints despite an increase in the number of stocks allocated to each market maker

willingness to pay and policy instrument choice for climate change policy in the united states abstract this paper provides the first willingness to pay wtp estimates in support of a national climate change policy that are comparable with the costs of actual legislative efforts in the u s congress based on a survey of 2034 american adults we find that households are on average willing to pay between 79 and 89 per year in support of reducing domestic greenhouse gas ghg emissions 17 by 2020 even very conservative estimates yield an average wtp at or above 60 per year taking advantage of randomized treatments within the survey valuation question we find that mean wtp does not vary substantially among the policy instruments of a cap and trade program a carbon tax or a ghg regulation but there are differences in the sociodemographic characteristics of those willing to pay across policy instruments greater education always increases wtp older individuals have a lower wtp for a carbon tax and a ghg regulation while greater household income increases wtp for these same two policy instruments republicans along with those indicating no political party affiliation have a significantly lower wtp regardless of the policy instrument but many of these differences are no longer evident after controlling for respondent opinions about whether global warming is actually happening

journalists and the stock market we use exogenous scheduling of wall street journal columnists to identify a causal relation between financial reporting and stock market performance to measure the media s unconditional effect we add columnist fixed effects to a daily regression of excess dow jones industrial average returns relative to standard control variables these fixed effects increase the r super 2 by about 35 indicating each columnist s average persistent bullishness or bearishness to measure the media s conditional effect we interact columnist fixed effects with lagged returns this increases explanatory power by yet another one third and identifies amplification or attenuation of prevailing sentiment as a tool used by financial journalists the author 2012 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

speculation spillovers this paper demonstrates that speculative activities can be contagious and spill over across markets specifically we test the hypothesis that during china s warrants bubble period speculative activities in the warrants market grabbed investors attention and caused them to trade more speculatively in the underlying stocks consistent with this hypothesis we find that turnover and return volatility of the underlying stocks are positively associated with the warrants unexpected turnover and price deviation from their fundamental values during the previous day controlling for information driven trading and hedging motives and that such a spillover effect is more pronounced when warrants attract more investor attention data as supplemental material are available at http dx doi org 10 1287 mnsc 2014 1914 this paper was accepted by wei xiong finance