ABSTRACT We study the performance of equity mutual funds run by asset management divisions commercial banking groups using a worldwide sample. show that bank‐affiliated underperform unaffiliated 92 basis points per year. Consistent with conflicts interest, underperformance is more pronounced among those affiliated overweight stock bank's lending clients to great extent. Divestitures support causal interpretation results. Our findings suggest fund managers their divisions’ operations reduce...

Abstract We show that production networks are important for the transmission of unconventional monetary policy. Firms with bonds eligible purchase under European Central Bank’s Corporate Sector Purchase Program act as financial intermediaries by extending additional trade credit to their customers. The increase in is pronounced from core countries periphery and financially constrained Customers then investment employment response increased financing, whereas suppliers expand customer base,...

Abstract We study the empirical determinants of Credit Default Swap (CDS) spreads through quantile regressions. In addition to traditional variables, such as implied volatility, put skew, historical stock return, leverage, profitability, and ratings, results indicate that CDS premiums are strongly determined by illiquidity costs, measured absolute bid‐ask spreads. The regression approach reveals high‐risk firms more sensitive changes in explanatory variables low‐risk firms. Furthermore,...

We study the determinants of Credit Default Swap (CDS) spreads through quantile regressions. The results indicate that CDS are strongly determined not only by traditional theoretical variables, such as implied volatility and put skew, but also illiquidity costs. However, contrary to stocks or bonds, we show transaction costs should be measured absolute, rather than relative, bid-ask spreads. regressions reveal significant heterogeneity in response low-risk versus high-risk firms, with both...

This paper challenges the view that foreign investors lead firms to adopt a short-term orientation and forgo long-term investment. Using comprehensive sample of publicly listed in 30 countries over period 2001-2010, we find instead greater institutional ownership fosters investment tangible, intangible, human capital. Foreign also leads significant increases innovation output. We identify these effects by exploiting exogenous variation follows addition stock MSCI indexes. Our results suggest...

We study the performance of equity mutual funds run by asset management divisions commercial banking groups using a worldwide sample. show that bank-affiliated underperform unaffiliated 92 basis points per year. Consistent with conflicts interest, underperformance is more pronounced among those affiliated overweight stock bank’s lending clients. Divestitures support causal interpretation results. Our findings suggest fund managers their divisions’ operations to reduce career concerns at...

We compare the performance of local versus foreign institutional investors using a comprehensive data set equity holdings in 32 countries during 2000-2010 period. find that institutions perform as well on average, but only domestic show trading pattern consistent with an information advantage. Our results suggest smart-money effect subject to higher asymmetry, non-English speaking countries, less efficient stock markets, poor investor protection, or high levels corruption. The advantage is...

We show that production networks are important for the transmission of unconventional monetary policy. Firms with bonds eligible purchase under European Central Bank’s Corporate Sector Purchase Program act as financial intermediaries by extending more trade credit to their customers. The increase in is pronounced from core countries periphery and financially constrained Customers investment employment response financing, while suppliers expand customer base, contributing upstream industry...