Miracle-dz/UniFAR-FTUs huggingface dataset:
Internal Control Weaknesses and Information Uncertainty

We analyze a sample of 330 firms making unaudited disclosures required by Section 302 and 383 firms making audited disclosures required by Section 404 of the Sarbanes-Oxley Act. We find that Section 302 disclosures are associated with negative announcement abnormal returns of -1.8 percent, and that firms experience an abnormal increase in equity cost of capital of 68 basis points. We conclude that Section 302 disclosures are informative and point to lower credibility of disclosing firms' financial reporting. In contrast, we find that Section 404 disclosures have no noticeable impact on stock prices or firms' cost of capital. Further, we find that auditor quality attenuates the negative response to Section 302 disclosures and that accelerated filers - larger firms required to file under Section 404 - have significantly less negative returns (-1.10 percent) than non-accelerated filers (-4.22 percent). The findings have implications for the debate about whether to implement a scaled securities regulation system for smaller public companies: material weakness disclosures are more informative for smaller firms that likely have higher pre-disclosure information uncertainty.
Keeping Your Cool: An Attention Driven Buying Pressure After Earnings News

This paper uses a novel and direct retail investor attention proxy to show that retail investor attention is important for information efficiency around earnings announcements. The main finding is the presence of asymmetric patterns in subsequent market responses to earnings surprises when retail investors are the most attentive. If earnings news is bad, a distinct drift is present. The drift is consistent with an attention-induced buying pressure, as attention predicts subsequent attention, abnormal trading, and long-run underperformance. If the news is good, then even though the announcement must also have been attention-grabbing, no drift is observed. The effects are intensified for stocks with higher limits to arbitrage and when institutional investors are the least attentive.
Text-Based Recession Probabilities

This paper proposes a new methodology based on textual analysis to forecast U.S. recessions. Specifically, the paper develops an index in the spirit of Baker et al. (2016) and Caldara and Iacoviello (2018) which tracks developments in U.S. real activity. When used in a standard recession probability model, the index outperforms the yield curve based forecast, a standard method to forecast recessions, at medium horizons, up to 8 months. Moreover, the index contains information not included in yield data that are useful to understand recession episodes. When included as an additional control to the slope of the yield curve, it improves the forecast accuracy by 5% to 30% depending on the horizon. These results are stable to a number of different robustness checks, including changes to the estimation method, the definition of recessions and controlling for asset purchases by major central banks. Yield and textual analysis data also outperform other popular leading indicators for the U.S. business cycle such as PMIs, consumers' surveys or employment data.
A Quantitative Analysis of the Countercyclical Capital Buffer

What are the quantitative macroeconomic effects of the countercyclical capital buffer (CCyB)? I study this question in a nonlinear DSGE model with occasional financial crises, which is calibrated and combined with US data to estimate sequences of structural shocks. Raising capital buffers during leverage expansions can reduce the frequency of crises by more than half. A quantitative application to the 2007-08 financial crisis shows that the CCyB in the 2:5% range (as in the Federal Reserve&apos;s current framework) could have greatly mitigated the financial panic of 2008, for a cumulative gain of 29% in aggregate consumption. The threat of raising capital requirements is effective even if this tool is not used in equilibrium.
Investing in Crises

We investigate asset returns around banking crises in 44 advanced and emerging economies from 1960 to 2016. In contrast to the view that buying assets during banking crises is a profitable long-run strategy, we find that returns of equity and other asset classes often underperform following banking crises. This underperformance is particularly pronounced for bank stocks. The collapse in equity prices during crises is followed by lower dividends rather than a bounce back in prices, suggesting that the collapse is primarily driven by real damage to earnings and balance sheets, rather than temporary investor leverage constraints or illiquidity. Long-run returns and dividends can be predicted at the time of the crisis with debt-overhang-related measures. Our findings suggest that, even during the acute phase of banking crises, equity investors do not fully recognize the extent of bad loans made by banks and the long-term real consequences of crises.
Impact of Universal Banking on Investment Decisions of Bank-Dependent Firms

The advantages and disadvantages of universal banking have long been debated. Using the successive granting of lead underwriter qualifications to commercial banks in China as a quasi-natural experiment, we study the impact of universal banking on non-financial firms’ investment decisions. We find that after a firm’s main lending banks qualify as lead underwriters, the firm’s investment increases by 7.7 to 8.3 percent on a gross or net basis. The underlying mechanism is that universal banking can generate informational economies of scope and relax constraints on the provision of external finance. In contrast, we find no evidence on the conflict of interest between universal banks and their customers. Our study, therefore, sheds light on the potential gains from universal banking.
Financial Development and Inequality in the Global Economy

We build a heterogeneous firms model with firm&#8208;specific wages and credit frictions to study the role of financial development for inequality in the global economy. If there are many small (non&#8208;exporting) firms, better access to external funds reduces wage and profit inequality as well as unemployment. In contrast, if there are many large (exporting) firms, financial development might have opposite effects &#8211; especially if trade costs are low. In summary, the implications of financial development for inequality depend on the size distribution of firms and on the costs of exporting. Trade liberalization, however, raises inequality unambiguously.
Is This Product Easy to Control? Liabilities of Using Difficult-To-Pronounce Product Names

Abstract This research studied difficult-to-pronounce product names which are prevalent in certain product categories. In study 1, consumers tried golf balls that varied in name pronounceability but were otherwise identical and, despite direct experience, concluded balls with difficult versus easy-to-pronounce names were less controllable and less preferable. In study 2, consumers were asked to look for a dog that was highly (less highly) controllable for an urban (rural) setting, and the dog with the difficult-to-pronounce name was viewed as less controllable because it seemed less familiar and was less preferred for the urban setting. Study 3 verified the effects of difficult-to-pronounce names on familiarity and controllability perceptions and found preference effects among those with high trait desire for control. Study 4 documented the prevalence of difficult-to-pronounce names on a popular ecommerce site for tires. Overall, our findings indicate managers should avoid using difficult-to-pronounce product names when consumers strongly desire product controllability.
Inferring Equity Durations Around FOMC Surprises: Estimates and Implications

Discount rates affect stock prices directly via the discount-rate channel or indirectly via the cash-flow channel because expected future cash-flow growth varies with the discount rates. The traditional Macaulay duration captures the effect from the discount-rate channel. I propose a novel duration measure, the effective equity duration, to capture the effects from both channels. I estimate it around unexpected policies in the federal funds rates. I find that the equity yield curve is hump-shaped because expected future cash flow growth increases with the discount rates. The effective equity duration captures information other than monetary policy risk.
Educational Inequality, Assortative Mating and Women Empowerement

Using PISA data for all waves and countries, it is shown that family cultural and economic background has bigger influence than school characteristics and quality on adolescents' math, reading and science scores. Women education, a proxy for women empowerment, has an added and increasing effect, when controlling for assortative mating. Their added value peaks at intermediate levels of education, but declines afterwards, when controlling for educational homogamy. A model with households' collective bargaining, warm glow preferences and human capital accumulation can rationalize the evidence. Through the lens of the model, mothers' higher impact is due either to higher devotion to child-rearing, which increases in presence of a gender wage gap, or to a within-household bargaining that raises in education, or else the empowerment externality.
Procyclical Asset Management and Bond Risk Premia

We use unique institutional securities holdings data to examine the trading behaviour of delegated institutional capital and its impact on bond risk premia. We show that institutional fund managers trade strongly procyclically: they actively move into higher yielding, longer duration and lower rated securities as yields fall and spreads compress, and vice versa. Funds more exposed to negative yields increase their risk-taking more strongly, and this effect is particularly pronounced for those offering explicit minimum return guarantees. Institutional funds' investments have large and persistent price impact in both corporate and sovereign bond markets. We provide evidence that this procyclical behaviour is driven by career concerns among institutional fund managers.
Forecasting Expected and Unexpected Losses

Extending a standard credit-risk model illustrates that a single factor can drive both expected losses and the extent to which they may be exceeded in extreme scenarios, ie “unexpected losses. ” This leads us to develop a framework for forecasting these losses jointly. In an application to quarterly US data on loan charge-offs from 1985 to 2019, we find that financial-cycle indicators – notably, the debt service ratio and credit-to-GDP gap – deliver reliable real-time forecasts, signalling turning points up to three years in advance. Provisions and capital that reflect such forecasts would help reduce the procyclicality of banks’ loss-absorbing resources.
Separating Winners from Losers Among Low Book-to-Market Stocks Using Financial Statement Analysis

This paper tests whether a strategy based on financial statement analysis of low book-to-market (growth) stocks is successful in differentiating between winners and losers in terms of future stock performance. I create an index (G_SCORE) based on a combination of traditional fundamentals such as earnings and cash flows and measures appropriate for growth firms such as the stability of earnings and growth and the intensity of R&D, capital expenditure and advertising. A strategy based on buying high G_SCORE firms and shorting low G_SCORE firms consistently earns significant excess returns. The results are robust across partitions based on size, stock price, analyst following, exchange listing and prior performance and are not affected by the inclusion or omission of IPO firms. The excess returns persist after controlling for well documented risk and anomaly factors such as momentum, book-to-market, accruals and size. The stock market in general and analysts in particular are much more likely to be positively surprised by firms whose growth oriented fundamentals are strong, indicating that the stock market fails to grasp the future implications of current fundamentals. Further, the results do not support a risk based explanation for the book-to-market effect as the strategy returns positive returns in all years, and firms that ex-ante appear less risky have better future returns. To conclude, one can use a modified fundamental analysis strategy to identify mispricing and earn substantial abnormal returns.
Production and Comparative Physicochemical Analysis of Vinegar from Locally Grown Fruits in Nigeria and Industrial Produced Vinegar

Vinegar is the product made from the conversion of ethyl alcohol to acetic acid by a genus of bacteria, Acetobacter. The major aim of the work is to produce a vinegar with locally made fruits and compare it with the industrial produced vinegar to ascertain if it can be used to substitute the industrial produced vinegar and to also determine if there are presence of acetic acid bacteria present in the vinegar which can be used as inoculants for future fermentation the sensory attributes were also analysed to determine the consumer acceptability of the vinegar produced. This work involves production of vinegar from locally produced fruits in Nigeria by homemade scale process and then analyzing the vinegar to determine the physicochemical components of the vinegar as well as identifying the acetic acid bacteria present in the vinegar and its sensory attributes. The vinegar produced was analysed for its pH, relative density and titrable acidity and from the result, there was no significant difference in the pH and relative density of the vinegars. The titrable acidity of the industrial produced vinegar is higher than the locally produced vinegars analysed. The microbial isolation of the vinegar for safety assessment gave no growths in the media used for the analysis which means that there are no pathogenic organisms like mould or coliform which can cause diseases to the consumers. The major organism isolated was the Acetobacter spp. although the culture independent methods should be carried out to determine other non culturable organisms present in the vinegar. The sensory evaluation shows that the locally produced was well accepted from the scores on the result presented. Generally, the result of this work shows that indeed vinegar of good quality can be produced locally using locally grown fruits but optimization of the process should be carried out to improve yield.
Auditor Task Prioritization: The Effects of Time Pressure and Psychological Ownership

We investigate the type of task auditors prioritize. Based on conservation of resources theory and an experiment, we predict and find that auditors tend to prioritize easy tasks over difficult tasks. We further investigate the effects of time pressure and psychological ownership on this prioritization of easy tasks. First, we find that auditors are more likely to prioritize easy tasks under conditions of high time pressure than of low time pressure. Second, we find that psychological ownership reduces the prioritization of easy tasks in low-time-pressure conditions but not in high-time-pressure conditions. The latter result suggests that interventions focused on improving job performance in audit firms may not materialize when job demands are high, such as under high time pressure.
Can Bitcoin Investors Profit from Predictions by Crypto Experts?

Using a hand-collected dataset containing buy, hold, and sell recommendations for Bitcoin published by crypto analysts, we show that hold and sell recommendations are followed by negative abnormal returns whereas buy recommendations are not associated with nonzero abnormal returns. Based on all outstanding recommendations, we compute recommendation changes relative to (i) the latest issued recommendation and (ii) the outstanding consensus recommendation. Downgrades are followed by negative abnormal returns. We conclude that crypto analysts are skilled information intermediaries on the Bitcoin market.
Tracking Global Economic Uncertainty: Implications for the Euro Area

This paper sheds light on the impact of global macroeconomic uncertainty on the euro area economy. We build on the methodology proposed by Jurado et al. (2015) and estimate global as well as country-specific measures of economic uncertainty for fifteen key euro area trade partners and the euro area. Our measures display a clear counter-cyclical pattern and line up well to a wide range of historical events generally associated with heightened uncertainty. In addition, following Pier and Podstawski (2018), we estimate a Proxy SVAR where we instrument uncertainty shocks with changes in the price of gold around specific past events. We find that, historically, global uncertainty shocks have been important drivers of fluctuations in euro area economic activity, with one standard deviation increase in the identified uncertainty shock subtracting around 0.15 percentage points from euro area industrial produc-tion on impact.
Entrapping of O2 Molecules in Nanostructured Silica Probed by Photoluminescence

We studied the emission of the O2 molecules embedded in fumed silica (amorphous silicon dioxide) nanoparticles differing for diameters and specific surface. By using a 1064 nm laser as a source we recorded both the O2 emission and the Raman signal of silica. Our experimental data show that the O2 emission/Raman signal (at 800 cm–1) ratio decreases with increasing the specific surface for both the as-received and the loaded samples. By performing a thermal treatment (600 °C for 2 h) we modified the structure and the water content of the smallest nanoparticles without observing any significant change in the O2 emission/Raman signal ratio. Our data are explained by a shell model showing that the O2 emission is essentially due to the molecules entrapped in the core of the nanoparticles, whereas the contribution due to the surface shell, having a thickness of about 1 nm, is negligible because of its high content of Si–OH groups that introduce nonradiative relaxation channels or because of the very low content .
Pareto Distribution of Consumption Values as an Origin of Utility Functions over Wealth with Constant Elasticity

This paper proposes a new theoretical foundation for utility functions over wealth with a constant elasticity. The key idea is that, when decision makers face an underlying distribution of consumption values for which they allocate their wealth to attain, then their utility over that wealth is shaped by that distribution. When the distribution has a Pareto tail, the implied utility function exhibits a constant elasticity when the wealth level is low. As its exponent approaches 1 (i.e. Zipf's Law), the utility function becomes approximately logarithmic. These results apply to many situations regardless of their contextual details thanks to statistical theories such as the generalized Central Limit Theorem. Besides this benchmark, most other standard distributions imply a decreasing elasticity, while some exceptions suggest an increasing elasticity. When applied to the labor supply elasticity, this approach predicts values of the compensated and uncompensated elasticity that are in accord with the evidence.
Fiscal Policy and Uncertainty

We investigate the impact of macroeconomic uncertainty on the stimulative effect of government spending. Using historical macroeconomic time series, we show that government spending multipliers are smaller in episodes characterized by high macroeconomic uncertainty. This state dependence is found to be both statistically and economically significant. We then build a DSGE model with an agency problem subject to time varying levels of uncertainty. We solve the model via higher-order perturbation and use the model to evaluate state-dependent government stimulus. We find significant state-dependence in multipliers which qualitatively matches our empirical results. We conclude that uncertainty plays a significant role in determining the effectiveness of fiscal policy and that business cycle models which abstract from uncertainty can produce misleading policy recommendations.
Measuring the Trend Real Interest Rate in a Data-Rich Environment

The trend real interest rate plays an important role in monetary policy decision making. Many papers have estimated it. However, the uncertainty surrounding these estimates is substantial. In this paper, we construct a new measure of the trend real interest rate in a data-rich environment using a large time-varying local mean Bayesian autoregression (VAR). This new measure is more precisely estimated and can provide valuable information to policymakers. The ranges of the 95% credible intervals of our proposed estimates are from 1.25% to 1.76%. Using the US data, we find that the trend real interest rate has declined substantially since 1984 and becomes negative after 2012.
When Less Is More: The Effects of Reciprocal Tie Formations on Content Generation

The ever-increasing volume of user-generated content (UGC) makes discovery of quality ones more and more challenging for content consumers. To mitigate the issue, content sites started to introduce social networks that are exclusive for providers. In such directed networks, a content provider can initiate unilateral outgoing ties to promote other peers, who in turn decide whether to reciprocate or not. Despite the prevalence of this networking feature, however, little work has sought to understand the effects that the formation of reciprocal ties might have on content-generating behaviors of reciprocated providers. We develop a hierarchical Bayesian model and estimate it using the UGC data collected from a major video content site. Our results show that social reciprocity has two opposite effects on the volume and the quality of subsequent content generation. Specifically, although providers tend to upload fewer videos after receiving reciprocal ties, the reduced productivity might not be as detrimental as it appears. Receipts of tie reciprocation, in effect, encourage reciprocated providers to create videos that are better appreciated by viewers. Taken together, the uncovered effects give rise to a “less is more” UGC environment for content consumers. A more granular investigation reveals that providers with fewer subscribers are more susceptible to the positive effect of reciprocity on content quality, which may help alleviate the prevalent “rich-get-richer” phenomenon observed on content sites. This research makes novel contributions to the literature by identifying the heterogeneous effects of social reciprocity in prevalent yet underexplored provider-to-provider networks.
Working to Rule: The Damaging Economics of UK Employment Regulation

A case can be made for greater regulatory competition after Brexit: apart from repatriation of regulation to the UK from the EU, there is an argument for devolution within the UK – for instance, allowing Scotland to set its own minimum wage. More fundamental reforms should involve adding a ‘sunset’ clause to a large body of existing employment legislation, followed by a major review of regulation with the default of scrapping laws which can no longer be justified. This could lead to a dramatic reduction in the categories of employment regulation from around 100 currently to perhaps just 5. Some have argued for less reliance on legislation but more emphasis on ‘voluntary’ measures such as the promotion of the Living Wage, or setting targets for women members on boards. These measures, however, are not an improvement on compulsion if the policy itself is damaging. Such pressures blur the boundaries of legitimate state power: businesses and individuals should not be cajoled into changing their priorities in line with often transient government objectives. <br>