Miracle-dz/UniFAR-FTUs huggingface dataset:
Persistent Negative Cash Flows, Staged Financing, and the Stockpiling of Cash Balances

Abstract Firms with negative net cash flows (NCFs) play an empirically important role in recent decades’ increase in the average cash-balance ratio of publicly held non-financial firms. Since 1971, negative NCFs have become much more pervasive, persistent, and greater in magnitude, and these patterns hold within the growing set of firms that have high intangible capital. In recent years, firms with negative NCFs tend to build cash balances through frequent equity offerings. The high cash balances tend to be transitory as subsequent negative NCFs lead firms to rapid cash-balance drawdowns, often followed by new stock sales and cash stockpiling of the proceeds. We conclude that funding needs and staged equity financing by negative NCF firms are central features of the secular rise in the average cash-balance ratio.
Who Truly Bears (Bank) Taxes? Evidence from Only Shifting Statutory Incidence

We show strong overall and heterogeneous economic incidence effects, as well as distortionary effects, of only shifting statutory incidence (i.e., the agent on which taxes are levied), without any tax rate change. For identification, we exploit a tax change and administrative data from the credit market: (i) a policy change in 2018 in Spain shifting an existing mortgage tax from being levied on borrowers to being levied on banks; (ii) some areas, for historical reasons, were exempt from paying this tax (or have different tax rates); and (iii) an exhaustive matched credit register. We find the following robust results: First, after the policy change, the average mortgage rate increases consistently with a strong â? but not complete â? tax pass-through. Second, there is a large heterogeneity in such pass-through: larger for borrowers with lower income, a smaller number of lending relationships, not working for the lender, or facing less banks in their zip-code, thereby suggesting a bargaining power mechanism at work. Third, despite no variation in the tax rate, and consistent with the non-full tax pass-through, the tax shift increases banks&apos; risk-taking. More affected banks reduce costly mortgage insurance in case of loan default (especially so if banks have weaker ex-ante balance sheets) and expand into non-affected but (much) ex-ante riskier consumer lending, experiencing even higher ex-post defaults within consumer loans.
Identifying Necessary Conditions in Accounting Research: Logical and Methodological Issues

The study discusses the challenges and opportunities of establishing a logic and method to identify necessary relationships in accounting research. Recent methodological advancements indicate that necessary conditions have not been precisely addressed, neither in hypotheses development, nor in data analysis, implying the presence of ambiguous communication and misleading identification in causal reasoning. A review of accounting literature confirms this lack of attention and guidance in accounting, in particular when formulating, testing, and interpreting necessity-related hypotheses. Therefore, the paper has a threefold purpose. First, we present the logic of necessary conditions to highlight the fundamental difference between sufficiency and necessity. Second, we introduce necessary condition analysis (NCA) to facilitate an appropriate and straightforward testing of necessary conditions. Finally, we illustrate NCA by applying it to a case of designing costing systems and indicate the complementary insights it generated in comparison to the results of a regression analysis. <br>
Under the same (Chole)sky: DNK models, timing restrictions and recursive identification of monetary policy shocks

Recent structural VAR studies of the monetary transmission mechanism have voiced concerns about the use of recursive identification schemes based on short-run exclusion restrictions. We trace out the effects on impulse propagation of informational constraints embodying classical Cholesky-timing restrictions in otherwise standard Dynamic New Keynesian (DNK) models. By reinforcing internal propagation mechanisms and enlarging a model's equilibrium state space, timing restrictions may produce a non-trivial moving average component of the equilibrium representation, making finite order VARs a poor approximation of true adjustment paths to monetary impulses, albeit correctly identified. They can even serve as an independent source of model-based nonfundamentalness, thereby hampering shock identification via VAR methods. This notwithstanding, restricted DNK models are shown to feature (i) invertible equilibrium representations for the observables and (ii) fast-converging VAR coefficient matrices under empirically tenable parameterizations. This alleviates concerns about identification and lag truncation bias: low-order Cholesky-VARs do well at uncovering the transmission of monetary impulses in a truly Cholesky world.
Inflation Compensation and Monetary Policy

We examine the transmission mechanism of monetary policy to inflation markets. We decompose monetary policy shocks in the United States into two orthogonal channels: the policy channel, measured by the change in 2-year nominal Treasury yield, and the communication channel, measured by the orthogonal change in 10-year nominal Treasury yield. We find that the conventional monetary policy affects long-term market-based inflation compensation through the communication channel, while the unconventional monetary policy affects short-term market-based inflation compensation through the policy channel. Our analysis also indicates that an announcement of quantitative easing corrects the short-term mispricing between the two inflation compensation measures, but amplifies long-term mispricing.
FDI and Firm Productivity in Host Countries: The Role of Financial Constraints

This paper studies the effect of FDI firms' financial advantages on firm productivity in host countries and examines the related policy implications. If FDI firms face lower financing costs but have higher fixed production costs than local firms, a simple Melitz-type model predicts that because of their financial advantages, FDI firms could have even lower cutoff productivity than local firms, especially in financially vulnerable sectors. The same mechanism will also lower the average productivity of FDI firms especially in financially vulnerable sectors, although FDI firms on average are still more productive than local firms. These predictions are supported by the Chinese firm-level data. Then, we study policy implications in a two-country model that resembles these empirical patterns. The counterfactual policy analysis shows that offering tax benefits to FDI firms could be counterproductive because it attracts FDI firms that are even less productive than local firms. The policy in the host country to improve its financial market efficiency could also hurt the country's welfare because of the interaction between financial market reforms and the distortionary taxes imposed on local firms to finance FDI subsidies.
What Drives the Sensitivity of Limit Order Books to Company Announcement Arrivals?

We provide evidence that recent losses amplify order book illiquidity shocks caused by non-scheduled news. Moreover, the faster markets’ reaction to scheduled and non-scheduled news arrivals is in terms of order book illiquidity, the more illiquid the order book becomes; that is, a fast reaction is a strong reaction. Additionally, order book asymmetry observed before announcement arrivals is positively associated with the magnitude of illiquidity shocks.
Government Support and Cross-Border Innovation: A Quasi-Experiment in China

Governments want firms to innovate new processes and products not only within their countries, but also across national boundaries. Many countries have initiated policies to support firm's global operations and innovation in other countries (cross-border innovation). How does government support influence emerging-market firm's cross-border innovation? Through the conceptual lens of slack resources, this study investigates the role of government support in firm's inventive activities in an uncertain, competitive global market. This study examines Chinese firms' patent filing in the U.S. under the enactment of the "innovative cities" policy. We apply a generalized difference-in-differences (DiD) technique to this staggered quasi-experimental setting and find that government support through the policy stimulates firm's cross-border innovation. We further show that firms with higher R&D capacity take better advantage of government support. In addition, we show that government support leads to a shift between firm's exploratory and exploitative innovation. Taken together, this study extends our understanding of slack from internal resources to government support in the context of global operations and bridges the gap between slack resources and cross-border innovation strategy. Findings of the study suggest that government actions that improve the ecosystem of innovation in one country also strengthen firm's innovation and competitiveness overseas.
Is the Presidential Premium Spurious

A hotly debated question in finance is whether the higher stock returns under Democratic presidencies relative to Republican presidencies represent abnormal return, risk premium, or mere statistical fluke. This paper investigates whether this presidential premium is due to spurious-regression bias, data mining, or economic policy uncertainty. Decomposing the presidential premium into expected and unexpected components, we find that over two-thirds of the premium is unexpected, which is inconsistent with the spurious regression bias explanation. The presidential premium is not explained by data mining given that it persists in the post-publication period, and remains robust even if we purge returns of their covariation with economic policy uncertainty.
Who Influences Whom? Behavior Contagion among Investors

Social interaction and information transmission are essential components of pricing and trading in financial markets. To investigate the behavior contagion and information cascades among investors and sectors, we deploy a jump-diffusion process on investor sentiment -- a novel dataset from StockTwits. Calibrating the process, we find that fundamental, professional, and swing traders are the most influential investors and leading in information cascades within investment approach, experience, and holding period categories, respectively, while momentum, novice, and position traders are the least. Furthermore, the COVID-19 Pandemic period systematically has a high impact on the occurrence of dispersing.
Optimal Technology Design

This paper considers a moral hazard model with (i) a risk-neutral agent and (ii) agent limited liability. Prior to interacting with the principal, the agent designs the production technology, which is a specification of the agent's cost of generating each output distribution with support contained in [0,1]. After observing the production technology, the principal offers a payment scheme and then the agent chooses a distribution over outputs. First, we show that there is an optimal design involving only binary distributions on {0,1}; that is, the cost of any other distribution is prohibitively high. Then, we characterize the equilibrium technology defined on the binary distributions and show that the equilibrium payoff of both the principal and the agent is 1/e. A notable feature of the equilibrium is that the principal is indifferent between offering the equilibrium bonus rewarding output one and anything less than that. Finally, the analysis of the model is shown to generalize to the case where the agent is risk averse.
Loss Expectation and Income Shifting

This study examines the effects of expected losses on income shifting from various perspectives. Using a set of worldwide multinational corporation (MNC) affiliates, this study first finds empirical evidence of ex ante adjustments of income-shifting strategies by affiliates, supporting the existence of limited flexibility introduced in Hopland et al. (2018, 2019). The study next identifies that loss-expecting affiliates with limited loss carry-forward periods have greater reverse incentives for income shifting than those with unlimited periods because the former must utilize potential losses within a limited period of time. Lastly, according to measurements of the magnitude of income shifting based on expected tax rate differences using the full sample of both profitable and loss affiliates, the methodology applied in traditional studies is found to overestimate the magnitude of income shifting.
What Drives Consumers’ to Pay High Premium Price for Luxury Brand While Rejecting High-Quality Non Luxury Brands

The paper gains an insight into the various motives underlying the purchase behavior of Indian luxury consumers when making a choice between exorbitantly priced luxury brands and high-quality non-luxury brands that are available at a fraction of cost. The study was conducted in the two metropolitan cities of India, Delhi and Mumbai, where 203 luxury consumers were examined for understanding the luxury buying motives. Ten retail luxury brands were carefully selected for the study. It was found that the consumers decide in favor of luxury brands over high-quality non luxury brands due to variables such as social recognition, social appeal, brand name/value, quality assurance, and social admiration.
Assessment of Internal Service Quality of University Library: Evidence from a State Government University in Nigeria

Universities all over the world are now competing for customers, ranked positions and funding from stakeholders. To realize these goals and have competitive edge in national and international university education business, individual universities need to provide superior service quality to internal and external customers. Thus, this study is evolved to evaluate the internal service quality of a state university library in Nigeria. The study adopted a survey research method in which a questionnaire instrument was used to gather data from the internal customers of the library (e.g. the library staff) numbering 31 in all. Data was analyzed by means of descriptive and inferential statistics (e.g. mean, correlation and t-test). The study found that the internal service quality of the library is poor for all service quality dimensions. The study also revealed that there is significant statistical difference between perceived and expected service quality of the library. The study, therefore, recommends that the university management should urgently upgrade the service quality of the university library by way of providing more library facilities (current books, e-library, computers, office equipment, etc.), train and develop the staff, and inculcate marketing orientations among the staff.
Count Data in Finance

This paper examines the use of count data-based outcome variables such as corporate patents in empirical corporate finance research. We demonstrate that the common practice of regressing the log of one plus the count on covariates ("LOG1PLUS" regression) produces biased and inconsistent estimates of objects of interest and lacks meaningful interpretation. Poisson regressions have simple interpretations and produce unbiased and consistent estimates under standard exogeneity assumptions, though they lose efficiency if the count data is overdispersed. Replicating several recent papers on corporate patenting, we find that LOG1PLUS and Poisson regressions frequently produce meaningfully different estimates and that bias in LOG1PLUS regressions is likely large.
Effect of Interest Rates and Bank Size on Profitability of Islamic Banks in an Interactive Model

This paper is aimed at studying the role of interest rates and bank size along with other macroeconomic and firm-level factors in determining the Islamic bank's profitability. We also explored the intricate complementarities of these two factors in the relationship between Profitability and bank-level factors. Other macro variables like GDP, Inflation and Exchange rate were taken as control. We have used the interaction effect of Bank-level variables like spread, efficiency, default risk, capital adequacy, liquidity, and leverage which were taken as predictors on profitability. Profitability was measured by Return on Asset and Equity. Data from full fledge Islamic banks in Pakistan was taken during the period of 2006-2018. These Islamic banks included were Al Baraka Bank Pakistan Ltd, BankIslamiPakistan Ltd (BIPL), Dubai Islamic Bank Pakistan Ltd (DIB), and Meezan Bank Limited. The regression analysis shows there is a significant impact of macroeconomic indicators, bank-specific variables, and interaction effect of interest and size on the Islamic bank's profitability. The interest rate and exchange rate have a negative and significant impact on ROE. Whereas Asset Quality, Gearing, and Capital Adequacy seem to have a positive and significant effect on profitability. Bank specific variables such as credit risk, spread ratio, and size also seem to negatively affect profitability. With regards to interaction effect, both size and interest rate seems to complement the effect of Asset Quality, Credit Risk, Spread Ratio on Profitability. However, both size and interest rates have a negative complementary with gearing in predicting profitability. Therefore, this study will help the policymakers, regulars, and bank management to identify the key drivers of profitability so they can increase the profitability of Islamic Banks in Pakistan.
A solid solution zeolitic imidazolate framework as a room temperature efficient catalyst for the chemical fixation of CO2

An energy efficient and economically viable bimetallic heterogeneous catalyst system composed of Co and Zn as active centers and 2-methylimidazole as a linker has been synthesized in water at room temperature. The synthesized material (CZ-ZIF) possesses a sodalite topology, similar to the parent materials, ZIF-8 and ZIF-67, with a high surface area of >1400 m2 g−1. The Zn and Co metal ions were shown to occupy equivalent sites throughout the framework in similar proportions, as confirmed by inductively coupled plasma atomic emission spectroscopy and energy dispersive X-ray spectroscopy techniques. CZ-ZIF rendered a high catalytic conversion of epoxides to five-membered cyclic carbonates using CO2 as the C1 source under solvent- and co-catalyst-free conditions with excellent selectivity and manifested better catalytic abilities than ZIF-67 and enhanced framework stability compared to ZIF-8. Furthermore, CZ-ZIF exhibited catalytic activity even at room temperature in the presence of a co-catalyst, and was reusable over a minimum of five cycles with no noticeable decrease in activity. A plausible mechanism for CZ-ZIF catalyzed solvent- and co-catalyst-free epoxide–CO2 cycloaddition has been proposed.
Equity Incentives and Financial Misreporting: Evidence from the Personal Wealth Pursuit Motive of CEOs*

The incentive effect of CEO portfolio delta (i.e., the sensitivity of CEO wealth to changes in stock price) on financial misreporting is inconclusive given a complex reward-risk tradeoff faced by CEOs. As the tradeoff is associated with a CEO’s explicit focus on personal wealth, we introduce a new theoretical insight into the tradeoff and focus on the CEO’s misreporting motive for pursuing wealth when testing the net incentive effect of delta. We identify wealth-pursuing misreporting via the Accounting and Auditing Enforcement Release (AAERs) and document that such misreporting is not only widespread in our sample but also positively explained by CEO portfolio delta. This positive association between CEO portfolio delta and wealth-pursuing misreporting is robust to the use of coarsened exact matching, the firm-year-fixed-effect model, the two-stage instrumental variable method, and a battery of supplementary analyses. We also approach the prior inconclusive empirical evidence in simulation analysis. Our findings have important implications for compensation design and corporate governance policy.
Not Just One Bet: Portfolio Managers' Cross Fund Risk-Taking

This paper documents that mutual fund managers who experience distress in one fund subsequently take on more risk in other funds they manage. Specifically, portfolio managers actively reallocate more stocks with higher systematic risk and lottery-like features in their linked funds. This increased risk-taking appears to be primarily motivated by managers' compensation contracts and is value-destroying for fund investors. The response to the distress shock is smaller for portfolio managers with long-term incentive compensation contracts, longer-tenured managers and female managers. These results highlight fund spillover effects through common portfolio managers and agency conflicts in the mutual fund industry.
Inconsistent Disclosures

Recent SEC regulations mandate that hedge fund advisers provide narrative disclosures of their business and operations. We find that 40% of these disclosures contain plausible inconsistencies regarding advisers' regulatory histories, conflicts of interest (COIs), and risks. Inconsistencies are associated with predictably lower performance and thus reflect omissions of likely material information. Inconsistent funds do not differ in their fund flows, flow-performance relation, leverage, ownership structure, or management fees, and thus appear to benefit by de-emphasizing fund problems and misleading attention-constrained market participants. Our study shows that inconsistencies represent a valuable signal largely ignored by even "sophisticated'' investors and highlights the need for regulatory review to reduce misleading disclosures.
Does Reporting Regulation Affect Earnings Quality? The Case of Foreign Firms

In this study we aim to investigate whether earnings quality varies accordingly the reporting regulation level stipulated by the SEC to U.S. and foreign firms listed in the U.S. market. Using abnormal accruals, earnings smoothness and managing towards earnings targets as earnings quality measures, and a sample containing U.S. and foreign firms listed in the U.S. market between 2000 and 2015, the results indicate that foreign firms complying with the full regulation tend to have more informative earnings than U.S. firms, while foreign firms with reporting regulation exemptions tend to have less informative earnings than U.S. firms. Concluding that the lower quality of foreign firms’ earnings found on prior literature could be diminish if the SEC regulated all firms at the same extent.
Friedman’s Plucking Model: New International Evidence From Maddison Project Data

Abstract Milton Friedman’s plucking model of business cycles hypothesizes that deeper recessions forecast larger booms while stronger booms do not necessarily forecast deeper recessions. While most previous past empirical work is limited to post-war data in the US, this paper tests the plucking model using Maddison Project growth data for 169 countries across several centuries. We find that the plucking property is broadly evident across time and countries. Plucking is particularly strong in advanced economies in East Asia (Japan), Europe (Western Europe) and North America (US and Canada) while to a lesser extent elsewhere in emerging economies. The overall strength of the plucking property globally also appears to have increased during the 20th century with the rise of widespread industrialized economies.