Convertible bond calls typically cause significant reactions in equity prices. The empirical research largely finds negative and positive announcement effects for the in-the-money and the out-of-the-money calls respectively. However, this research has difficulty distinguishing between the two main theoretical explanations: the signaling effect and the price pressure effect. In this paper, we differentiate between these two effects by using a unique data set of the in- and the out-of-the-money calls in the United States during the period of 1993 to 2007. We find that the announcement effect for the in-the-money call is predominantly explained by the subsequent order imbalances; and the stock market's reaction is spread over an entire trading day, which is consistent with the price pressure effect. In contrast, the announcement effect for the out-of-the-money call is driven by the size of the called convertible bond; and the stock market's reaction is almost immediate, which is consistent with the signaling effect.

During recessions, the focus on male job losses may overshadow other important outcome variables. We examine the effects of economic downturns on occupational segregation by gender, using staffing data from over 6 million private-sector US establishments from 1966-2010. Consistent with the literature, we find a downward trend in occupational segregation that is diminishing over time. Drawing upon Rubery's (1988) work on women and recessions, we find support for both the buffer and the segmentation hypotheses. On net, however, the buffer hypothesis appears to dominate providing evidence that in periods of economic decline the trend of decreasing economic dissimilarity is interrupted.

This paper investigates the impact of institutional herding on stock price formation, conditional on firms’ credit ratings, using 13F data from 1986 to 2019. In line with the current literature, we find herding intensity is driven by past returns consistent with momentum trading; however, we also find that herding is more sensitive to past returns for non-investment grade (NIG) stocks than investment grade (IG) stocks, resulting in a market bifurcation. We then examine the price impact of these trades and find that herding in NIG equities enhances price discovery. One plausible explanation is that information gradually diffuses within non-investment grade stocks, and herding behavior strengthens information discovery. Finally, we show both momentum-triggered herding and non-momentum-triggered herding contribute to price discovery among non-investment grade stocks.

Despite extensive monitoring, banking operations are often considered opaque, and despite explicit capital adequacy regulation, banks may have substantial discretion in their financing. Both monitoring and capital regulation have changed substantially over time, with the adoption of FDICIA being one important breakpoint. This article empirically studies seasoned equity offerings (SEOs) by banks to understand how opacity and capital regulation interact to determine the timing of bank SEOs and their market valuation. SEOs both by banks that are undercapitalized relative to regulatory standards and also well-capitalized banks are fully discretionary when it comes to SEOs, even before FDICIA. Both undercapitalized and well-capitalized banks experience similar and significantly negative stock price reactions to SEO announcements, and also have similar prior patterns of insider trading and similar economic drivers of the issuance decision. Moreover, post-SEO abnormal stock returns are similar to benchmark returns for both types of issuers in the long run, suggesting that, contrary to the well-documented evidence for industrial SEOs, investors understand the value implications of bank SEOs upon announcement. The evidence implies that undercapitalized banks' SEOs are more discretionary and that all bank SEOs are less opaque than implied by earlier studies.