Using a novel dataset of US companies’ regular board meeting schedules, we find evidence of informed trading by outside directors prior to board meetings. During the days prior to board meetings, when outside directors possess private information, they make more profitable and larger purchases than they do during other periods. We find no such patterns among inside directors who possess private information regardless of the timing of board meetings. We further find that the profitability of outside directors’ purchases made prior to board meetings is associated with subsequent news disclosures and is realized shortly after the purchases, consistent with the opportunistic use of private board meeting information. Our findings suggest that providing private information to outside directors in preparation for board meetings—a process deemed necessary for effective board monitoring—can facilitate opportunistic insider trading.

The coronavirus disease 2019 (COVID-19) pandemic has led to an increase in cases of racial discrimination against Asians, especially Chinese people. Despite an emerging stream of studies investigating various aspects of the COVID-19 pandemic, research on the behavioral consequences of racial discrimination during the pandemic remains scarce. In this work, we examined how racial discrimination stemming from the COVID-19 pandemic and subsequent anti-discrimination were manifested on online platforms. By combining difference-in-differences analyses on two large-scale panel data sets from Yelp.com and SafeGraph and two controlled experiments, we explored the impact of COVID-19 on Chinese restaurants relative to non-Chinese restaurants at different phases of the COVID-19 pandemic. We found that the COVID-19 pandemic led to an immediate increase in racial discrimination, which was reflected in a significant drop in the customer patronage frequency of Chinese restaurants as compared with that of non-Chinese restaura

We present a tractable model that accommodates asset-market sentiment in a standard Dynamic Stochastic General Equilibrium (DSGE) setting, allowing us to quantitatively evaluate sentiment-driven macroeconomic fluctuations. In our model, changes in households' perceived uncertainty about housing prices lead to self-fulfilling fluctuations in housing prices, which then impact investment and output through entrepreneurs' collateral constraints. Household sentiment shocks hence are transmitted and propagated to the macroeconomy, generating boom–bust cycles. Uncertainty, housing prices, and the real economy are linked. Quantitatively, the sentiment shock in the form of risk–panic is a crucial driver of business cycle fluctuations despite the presence of various competing shocks.

Over the period 1992–2018, we investigate the economic impact of scandal-tainted congresspersons on politically connected firms. Following the first media report of a scandal, firms connected to the scandal-tainted congressperson experience a relative loss in market value. The loss manifests through both a reputational spillover and a reduced effectiveness of the congressperson in granting political favors to firms. Our findings indicate an undocumented cost of corporate political connections—the loss that occurs when a connected politician is caught up in a scandal.

We examine the role of peer (e.g., Lipper manager indices) versus pure (e.g., S&P 500) benchmarks in fund manager compensation. We model their impact on manager incentives and then test those predictions using novel data. We find that 71% of managers are compensated based on peer benchmarks. Consistent with the model, peer-benchmarked fund managers exhibit higher effort generating higher gross performance and collect higher fee income. Analyzing advisors’ choice between benchmark types, we show that peer-benchmarking advisors cater to more sophisticated and performance-sensitive investors, and are more likely to sell through direct channels, consistent with investor heterogeneity and market segmentation.

Using the positive shift in tone of Fox News coverage of macroeconomic news after the Republican Bush election in 2000, we investigate whether media slant influences the investment decisions of short sellers. We find that firms headquartered in Republican-leaning townships with Fox News availability experienced a relative decrease in short interest post the 2000 election. We further find that the relative decrease is more pronounced for firms that are more subject to investors' home bias. We interpret our findings to mean that short sellers, as sophisticated as they may be, are not immune to the slant in media coverage.

Scientists are increasingly expected to participate in public engagement around prominent science and technology issues. However, scientists remain concerned that public engagement takes time away from conducting research. Little is known about the relationship between scientists’ productivity and their willingness to participate in different types of public engagement. Using a census survey of scientists from 30 U.S. land-grant universities (N = 5,208), we find that productive scientists are slightly more willing to participate in public scholarship than less productive scientists. In addition, social science consideration, institutional incentives, and self-efficacy are associated with a greater willingness to participate in public scholarship and informal science education.

This paper studies social security reforms in a model with declining population growth and increasing life expectancy. Based on simulations using data on China, it is found that a switch from a pay-as-you-go (PAYG) system to a notional defined contribution system favors the rich, causes the poor to work more, and may change the capital-effective labor ratio depending on the rate of return to personal accounts. A switch from the PAYG system to a modified PAYG system that saves part of the receipts, with the interest rate greater than the growth rate, increases labor supply and decreases the capital-effective labor ratio in period one; decreases labor supply and increases the capital-effective labor ratio after period one; and hurts the poor old more than the rich old while benefitting the poor in future generations more than the rich. If the interest rate is less than the growth rate, the accumulated funds are insufficient to balance the social security budget.

This paper considers the estimation of panel data models with interactive fixed effects where the idiosyncratic errors are subject to conditional quantile restrictions. An easy-to-implement two-step estimator is proposed for the coefficients of the observed regressors. In the first step, the principal component analysis is applied to the cross-sectional averages of the regressors to estimate the latent factors. In the second step, the smoothed quantile regression is used to estimate the coefficients of the observed regressors and the factor loadings jointly. The consistency and asymptotic normality of the estimator are established under large asymptotics. It is found that the asymptotic distribution of the estimator suffers from asymptotic biases, and this paper shows how to correct the biases using both analytical and split-panel jackknife bias corrections. Simulation studies confirm that the proposed estimator performs well with moderate sample sizes.

This paper examines whether state ownership and political connections affect the relationship between customer concentration and cash holdings for Chinese listed manufacturing firms. We show that non-state-owned firms, but not state-owned firms, hold more cash as customer concentration increases. In addition, political connections weaken the positive effect of customer concentration on non-state-owned firms’ cash holdings. Our supplemental analyses further show that for non-state-owned firms with limited access to finance—for instance, firms with low analyst following, low institutional ownership, or low government subsidies—the effects of political connections on weakening the positive association between customer concentration and cash holdings are more pronounced. Additional robustness tests support our arguments.