We find that U.S. corporations increase their cash holdings in response to higher economic policy uncertainty. The increase in cash holdings is not attributed to a reduction in firm investments. This increase is more pronounced for financially constrained firms or those with larger exposure to policy uncertainty. Holding more cash in the presence of policy uncertainty alleviates the negative impact of policy uncertainty on capital investment and firm innovation outputs. Our findings demonstrate that cash holdings represent an important channel in mitigating the negative effect of policy uncertainty on firm real economic activities.

Using insights from prosecuted cases, we present compelling evidence of large-trade based manipulation in a sizeable number of Indian IPOs that, in all likelihood escaped enforcement actions. Consistent with the pump-and-dump scheme these IPOs exhibit abnormally high volume of large trades, a significant fraction of which originates from a syndicate of traders present in the prosecuted IPOs. More importantly, stock price in the manipulated IPOs rises initially on account of artificial trades, but then declines significantly as the manipulators exit the market. Interestingly, not all attempts at manipulation are entirely successful as stock price in some of the manipulated IPOs crash on the first day of listing.