We identify firms according to two life cycle stages, namely growth and maturity, test the pecking order theory of financing. find a strong maturity effect, i.e. describes financing behavior mature better than firms. Our findings show that firm is an alternative proxy for debt capacity. In particular, are older, more stable highly profitable with good credit histories. Thus, they naturally have greater After controlling fairly well.

The Securities and Exchange Commission's (SEC) Electronic Data Gathering Retrieval (EDGAR) log files provide a direct, powerful measure of attention from relatively sophisticated investors. authors apply this to sample earnings announcements 2003 2016. find that the stock market is less surprised, post–earnings-announcement drift weaker for receiving more preannouncement investor attention, measured in downloads by humans EDGAR. further show it profitable utilize different patterns. An...

Corporate life-cycle concept is widely used in a variety of disciplines, including management, economics and accounting, also the real-world investment. However, current commonly methodologies measuring stages are either only suitable for small sample studies or applicable cross-sectional analysis corporations over stages. None them can be employed large-sample, time-series analysis. This paper develops new methodology which makes study large-sample properties within each stage possibility,...

This study of the post–earnings announcement drift and value–glamour anomaly finds that value stocks have greater information uncertainty, exhibit more-muted initial market reactions to earnings surprises, better (more positive or less negative) drifts than do glamour stocks. A trading strategy based on these findings can generate an average annual abnormal return 16.6–18.8 percent before transaction costs.

Using a broad sample of earnings announcements, we show that the initial stock market's response substantially increases and post‐earnings announcement drift becomes much weaker in presence more active pre‐earnings option trading. We find strongest originates from those announcements with higher trading, fewer competing made on non‐Fridays. Our interpretation is heightened investor attention, as captured by non‐Friday accelerates mitigates market under‐reaction.

Theoretical models on herd behavior predict that under different assumptions, herding can drive prices away from (or toward) fundamentals and reduce enhance) market efficiency. In this article, we study the joint effect of momentum at industry level. We find is magnified when there a low level investor herding. Herd in investors helps move asset toward fundamentals, enhances efficiency, reduces effect. A trading strategy taking long position winner industries short loser generate significant...

This paper investigates investor inattention as a plausible explanation for market reaction to repurchase announcements. We use prior turnover the proxy attention examine difference in stock price performance between low-attention stocks and high-attention stocks. find that low firms experience greater underreaction announcements than high firms. Low also larger positive long-run excess returns following Furthermore, higher level of investor's leads degree underreactions, resulting actual...

We examine the central prediction of pecking order theory financing among firms in two distinct life cycle stages, namely growth and maturity. In general, we find that both stages follow order. More specifically, within a stage after sufficiently controlling for debt capacity constraints across several dimensions, with high adverse selection costs more closely, as predicts. further show certain determinants are specific to each stage, cannot simply be generalized broad sample firms. Our...

Abstract In this paper, we show that the individual skewness, defined as average of monthly skewness across firms, performs very well at predicting return S&P 500 index futures. This result holds after controlling for liquidity risk or current business cycle conditions. We also find futures returns out‐of‐sample.

Using a multi-stage filtering procedure based on both algorithms and human judgement, we develop Chinese Financial Sentiment Dictionary (CFSD) with the hope to help advance textual analysis of documents in accounting finance. There are 1,489 negative words 1,108 positive CFSD. We translate all 2,597 into English. also briefly discuss two unique settings which researchers can investigate some important interesting research questions that rarely studied due lack data.