Public Trading and Private Incentives:

Faure-Grimaud, Antoine; Gromb, Denis

doi:10.1093/rfs/hhh002

Cited by 231 publications

(98 citation statements)

References 47 publications

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“…The idea that the production and aggregation of information as a consequence of trading between speculators and investors can be useful for the provision of incentives in firms is a relatively recent one. Specifically, Holmström and Tirole (1993) and Faure-Grimaud and Gromb (2004) examine the role of price informativeness in disciplining managers and providing incentives to insiders to engage in value-increasing activities. Dow and Gorton (1997) show that, in equilibrium, the information contained in stock prices can be used to guide investment decisions because managers are compensated based on future stock prices.…”

Section: Related Literaturementioning

confidence: 99%

The bright side of financial derivatives: Options trading and firm innovation

Blanco

Wehrheim

2017

Journal of Financial Economics

116

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Do financial derivatives enhance or impede innovation? We aim to answer this question by examining the relationship between equity options markets and standard measures of firm innovation. Our baseline results show that firms with more options trading activity generate more patents and patent citations per dollar of R&D invested. We then investigate how more active options markets affect firms' innovation strategy. Our results suggest that firms with greater trading activity pursue a more creative, diverse and risky innovation strategy. We discuss potential underlying mechanisms and show that options appear to mitigate managerial career concerns that would induce managers to take actions that boost short-term performance measures. Finally, using several econometric specifications that try to account for the potential endogeneity of options trading, we argue that the positive effect of options trading on firm innovation is causal.

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Section: Related Literaturementioning

confidence: 99%

The bright side of financial derivatives: Options trading and firm innovation

Blanco

Wehrheim

2017

Journal of Financial Economics

116

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“…Logarithmic of Amman stock Exchange index (LSMI): Developed stock markets provide two advantages for listed companies: first, providing information second, reducing capital constraints by selling or buying their shares in the stock exchange (Allen, 1993;Jensen, 1989;Faure-Grimaud & Gromb, 2004).…”

Section: Independent Variablesmentioning

confidence: 99%

The Impact of Macroeconomic Variables and Banks Characteristics on Jordanian Islamic Banks Profitability: Empirical Evidence

Al-Qudah¹,

Jaradat

2013

IBR

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The aim of this study is to determine the effect of macroeconomic Variables (external variables) and bank characteristic (internal variables) on the profitability of Jordanian Islamic banks for the period (2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011).the study used panel data analysis fixed effects model and the generalized least square method to examine the study hypotheses. The empirical analysis shows that capital adequacy, bank size have a positive and significant impact on return on assets (ROA) and return on equity (ROE). While leverage measured by total deposit to total assets has a negative and significant impact on (ROA) and (ROE). The liquidity has an inersary insignificant effect on (ROA) and negative significant impact on (ROE). The study found that macroeconomic factors represented by Amman stock exchange index, construction licensed square meters and money supply growth are good determinants for Islamic banks profitability.

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“…Therefore, (27) implies that the price upon exit in equilibrium must be the unique solution of p = p +" . Suppose " > min fr 0 ; r 00 g. If " < r 0 then, according to Claim 2, p = p +" has a solution, and it can arise in equilibrium.…”

Section: Ifmentioning

confidence: 99%

Soft Shareholder Activism

Levit

2012

SSRN Journal

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This paper studies communications between investors and firms as a form of corporate governance. The main premise is that activist investors cannot force their ideas on companies; they must persuade the board or other shareholders that implementing these ideas is in the best interest of the firm. In this framework, I show that voice (launching a public campaign) and exit (selling shares) enhance the ability of activists to govern through communication. The analysis identifies the factors that contribute to successful dialogues between investors and firms. It also shows that public communications are likely to be ineffective, justifying the prevalence of behind-the-scenes communications. Abstract This paper studies communications between investors and …rms as a form of corporate governance. The main premise is that activist investors cannot force their ideas on companies; they must persuade the board or other shareholders that implementing these ideas is in the best interest of the …rm. In this framework, I show that voice (launching a public campaign) and exit (selling shares) enhance the ability of activists to govern through communication. The analysis identi…es the factors that contribute to successful dialogues between investors and …rms. It also shows that public communications are likely to be ine¤ective, justifying the prevalence of behind-the-scenes communications.

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Public Trading and Private Incentives:

Cited by 231 publications

References 47 publications

The bright side of financial derivatives: Options trading and firm innovation

The bright side of financial derivatives: Options trading and firm innovation

The Impact of Macroeconomic Variables and Banks Characteristics on Jordanian Islamic Banks Profitability: Empirical Evidence

Soft Shareholder Activism

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