This paper studies parental investment in education and intergenerational earnings mobility for father-son pairs with nativeand foreign-born fathers. We illustrate within a simple model that for immigrants, investment in their children is related to their return migration probability. In our empirical analysis, we include a measure for return probabilities, based on repeated information about m...

We test the hypothesis that investment constraints in delegated portfolio management may distort demand for stocks, leading to price underreaction to news and stock return predictability. We find that institutions tend not to buy more of a stock with good news that they already overweight; they are reluctant to sell a stock with bad news that they already underweight. Stocks with good news over...

Dividend smoothing remains a puzzle for …nancial economists. We present a model in which smoothing of dividends arises as an equilibrium outcome. A manager who cares about the intrinsic value of the …rm as well as its current stock price has to decide how to allocate earnings between investments and dividends. Since the stock price is determined by uninformed investors, the manager has an incen...

This paper investigates the stock characteristic preferences of active Australian equity managers. We examine the following characteristics: stock price variance, momentum, size, transaction costs, earnings yield, analyst coverage and the standard deviation of analyst forecasts. In aggregate we find that active managers exhibit preferences for stocks exhibiting high price variance, large market...

The anomalies literature in capital markets research in finance and accounting is based (almost) exclusively on average realized returns. In contrast, we construct accountingbased expected returns for dollar-neutral long-short trading strategies formed on a wide array of anomaly variables, including book to market, size, composite issuance, net stock issues, abnormal investment, asset growth, i...

n denote the number of years per period, r denote the annual interest rate, r denote the per period interest rate, r = (1 + r) n − 1, δ, δ denote the annual and per period capital depreciation rates δ = (1 − δ) n − 1, g, g denote the annual and per period steady-state growth rates, R denote the base year capital earnings, I denote base year investment. The model we will calibrate involves inves...

We consider renegotiation of social earnings insurance arrangements by majority voting in an economy where ex-ante identical individuals make unobservable private investments in education. We show that voting-based renegotiation can result in a higher expected level of investment in comparison to the case where social insurance is determined by an appointed social planner. We also find that, wi...

We develop a model where dividend payout, investment and financing decisions are made by managers who attempt to maximize the rents they take from the firm. But the threat of intervention by outside shareholders constrains rents and forces rents and dividends to move in lockstep. Managers are risk-averse, and their utility function allows for habit formation. We show that dividends follow Lintn...

This paper develops and structurally estimates a life cycle model of optimal college investment with risk in degree completion and labor earnings. I argue that low income children’s stronger precautionary saving motive, which is due to their parents’ inferior capacity to insure them against college investment risk, impedes their college attendance. I construct a dynamic non-cooperative game to ...

T his study examines the effect of oil fluctuation export earnings on government income and expenditure in Nigeria using a time series data from 1986 to 2015. The study utilized co-integration techniques and ordinary least square as the methods of analyses. The co-integration tests indicate the existence of a long-run equilibrium relationship between oil...