I. Personal interviews with a representative sample of business executives, 67; sampling, 69; interviewing, 70. — II. Study of industrial mobility, 72; advantages of Michigan location, 72; disadvantages of Michigan location, 76; qualitative information, 78; conclusions, 81. — III. Study of investment decisions, 82; the direct question of why, 83; correlation analysis, 86; detailed analysis of correlation cells, 88; summary, 89.

Program trading and intraday changes in the S&P 500 Index are correlated. Futures prices and, to a lesser extent, cash prices lead program trades. Index arbitrage trades are followed by an immediate change in the cash index, which ultimately reverses slightly. No reversal follows nonarbitrage trades. The cumulative index changes associated with buy-and-sell trades and with arbitrage and nonarbitrage trades all are similar. Price decompositions suggest that the results are not due to microstructure effects. Program trades in this 1989–1990 sample do not seem to have created major short-term liquidity problems. The results are stable within the sample.

This article examines the use of foreign currency derivatives (FCDs) in a sample of 720 large U.S. nonfinancial firms between 1990 and 1995 and its potential impact on firm value. Using Tobin’s Q as a proxy for firm value, we find a positive relation between firm value and the use of FCDs. The hedging premium is statistically and economically significant for firms with exposure to exchange rates and is on average 4.87% of firm value. We also find some evidence consistent with the hypothesis that hedging causes an increase in firm value.

Charles Brown, George Fane, James Medoff; The Income Distribution as a Pure Public Good: Comment*, The Quarterly Journal of Economics, Volume 87, Issue 2,

We provide empirical evidence that a firm's overall visibility with investors, as measured by its product market advertising, has important consequences for the stock market. Specifically we show that firms with greater advertising expenditures, ceteris paribus, have a larger number of both individual and institutional investors, and better liquidity of their common stock. Our findings are robust to a variety of methodological approaches and to various measures of liquidity. These results suggest that the investors' degree of familiarity with a firm may affect its cost of capital and consequently its value.