Agency Costs and Strategic Speculation in the U.S. Stock Market
dc.contributor.author | Pasquariello, Paolo | |
dc.date.accessioned | 2015-09-18T12:48:16Z | |
dc.date.available | 2015-09-18T12:48:16Z | |
dc.date.issued | 2016-11 | |
dc.identifier | 1284 | en_US |
dc.identifier.uri | https://hdl.handle.net/2027.42/113259 | |
dc.description.abstract | This study shows theoretically and empirically that a firm's agency problems may affect its stock liquidity. We postulate that less uncertainty about suboptimal managerial effort may enhance liquidity provision -- by lowering dealers' perceived adverse selection risk from trading with better-informed speculators. Consistent with our theory, we find that the staggered adoption of antitakeover provisions across U.S. states in the 1980s and 1990s -- a plausibly exogenous shock reducing perceived effort uncertainty by unambiguously facilitating managerial agency -- improves the stock liquidity of affected firms relative to peer firms. This evidence suggests that firm-level agency considerations play a nontrivial role for the process of price formation in financial markets. | en_US |
dc.subject | Corporate Governance | en_US |
dc.subject | Agency Costs | en_US |
dc.subject | Liquidity | en_US |
dc.subject | Strategic Trading | en_US |
dc.subject | Price Formation | en_US |
dc.subject | Stock Markets | en_US |
dc.subject.classification | Finance | en_US |
dc.title | Agency Costs and Strategic Speculation in the U.S. Stock Market | en_US |
dc.type | Working Paper | en_US |
dc.subject.hlbsecondlevel | Finance | en_US |
dc.subject.hlbtoplevel | Business | |
dc.contributor.affiliationum | Ross School of Business | en_US |
dc.contributor.affiliationumcampus | Ann Arbor | |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/113259/1/1284_Pasquariello.pdf | |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/113259/4/1284_Pasquariello_Jan2016.pdf | |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/113259/6/1284_Pasquariello_May2016.pdf | |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/113259/8/1284_Pasquariello_Nov2016.pdf | |
dc.description.filedescription | Description of 1284_Pasquariello_May2016.pdf : May 2016 Revision | |
dc.description.filedescription | Description of 1284_Pasquariello_Jan2016.pdf : January 2016 revision | |
dc.description.filedescription | Description of 1284_Pasquariello_Nov2016.pdf : November 2016 revision | |
dc.owningcollname | Business, Stephen M. Ross School of - Working Papers Series |
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