This paper demonstrates that investor irrationality can be contagious across markets. Studies addressing the pros and cons of opening derivatives markets have failed to pay sufficient attention to the roles of speculative activities. This paper investigates how trading activities that are unrelated to fundamentals affect the impact of derivatives on stock markets. By using unique data from the ...

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This paper investigates the impact of exchange rate fluctuations on the value of nonfinancial firms in Chile. Using a detailed dataset on firms’ foreign activities, the potential determinants of the identified exposure are examined. Foreign exchange exposure depends on the levels of foreign currency debt and foreign currency assets. Levels of tradeables (exports and imports) do not explain expo...

Title of dissertation: INTERNATIONAL CORPORATE GOVERNANCE: A STUDY OF COMPLEMENTARITIES AND CONVERGENCE Meghana Ayyagari, Doctor of Philosophy, 2004 Dissertation directed by: Professor Vojislav Maksimovic Department of Finance This thesis contributes to contemporary research in international corporate governance by investigating two related questions: (1) Is there a convergence in corporate gov...

What motivates investors to hold American Depositary Receipts (ADRs) rather than the underlying stock of U.S. listed foreign firms? We analyze the investment allocation decision of actively-managed emerging market mutual fund managers. Although legal provisions are typically assumed to affect ADR and its underlying domestic shares equally, investors holding ADRs may have a higher level of legal...

Using data spanning the 1996-1998 fiscal years of 247 of Japan’s largest manufacturers, we empirically evaluate the extent to which a firm’s investment behavior and financial performance is influenced by its ownership structure. To do so, we examine six distinct categories of Japanese shareholders: foreign investors, investment funds, pension funds, banks and insurance companies, affiliated com...

This paper shows that investor-state dispute settlements (ISDS) make multinational firms more aggressive by increasing cost-reducing investments with the aim to enlarge potential compensation an ISDS provision may offer. While a larger investment reduces market distortion, it will also compensations larger. Consequently, foreign investor do not imply zero-sum game. decrease domestic welfare, in...