This study examines the impact of multi-tasking teams on fund performance. We find that while managerial multi-tasking has a negative impact on fund performance, teamwork can mitigate the adverse effect associated with managerial multi-tasking, which is indicative of superior performance of funds managed by multi-tasking teams. More importantly, it is the characteristics of the multitasking team that contribute to these superior results, which can be attributed to network cognitive diversity, suggesting that extended networks, facilitated by indirectly-connected managers via local teammates, can largely enhance the scale of cognitive diversity, thus generating significant gains through information pooling and integration. In assessing possible mechanisms for the observed superior performance, we find evidence of improved decision-making induced by network cognitive diversity through both transmission and sharing of value-relevant information, and speedy information diffusion.

We find that dividend paying firms demonstrate superior corporate social responsibility (CSR) performance in the subsequent year than non-paying firms. This effect can be explained by stakeholder relationship management through CSR, as dividend payout reflects the inherent conflict between shareholders and stakeholders. Specifically, for dividend payers, we find an increase in CSR performance after states adopt constituency statutes which encourage board’s attention on stakeholders, supporting a causal inference of the stakeholder relationship management’s effect on CSR. The increase in dividend payers’ CSR around the constituency statute adoption is more pronounced when management is friendlier to CSR, which lends further support for the stakeholder relationship management channel. We find no support for the short-termism view of dividends or the notion that CSR is solely an outcome of agency problems within firms. In conclusion, our findings suggest that dividend payout serves as a mechanism for balancing shareholder and stakeholder interests, leading to improved CSR performance among dividend-paying firms.

This article examines the role of CEOs' personal incentives in steering their firms' CSR initiatives following their compensation peers, subsequently influencing their career trajectories within their current firms. Specifically, we find that firms exhibit better corporate social responsibility (CSR) performance if their compensation peer (CP) firms demonstrated superior CSR performance in the prior year (i.e., the CP effect). To mitigate the endogeneity concern, we conduct analyses based on the termination (initiation) of CPs' peer relation with the focal firm, a benchmark test, and an instrumental variable analysis. To establish the mechanisms of internal monetary rewards from their firms and enhanced external career tournaments in the labor market, we show the CP effect is stronger if the focal company CEOs have compensation contracts specifying CSR performance targets, face a larger compensation shortfall relative to their CP counterparts, operate in closer geographical proximity to those CP CEOs, or hire more compensation consultants. Furthermore, we find that the probability and quantity of CSR contracts received by focal firms' CEOs increase with CPs' lagged CSR. CEOs receive higher compensation than those in CP firms after they deliver better CSR performance than their CPs. Overall, our paper highlights the role of CEOs' personal incentives in steering their firms' CSR initiatives, subsequently influencing their career trajectories within their current organizations.

Abstract We present new facts on how convenience yields fluctuate with macroeconomic variables and fiscal policy: the convenience yield of long-term Treasuries is negatively correlated with inflation expectations, and inflation expectations predict future debt-to-GDP growth. To rationalize these findings, we incorporate the convenience yield into a macro-finance model with endogenous fiscal policy. The government finances deficit shocks partially through higher inflation and partially through more future borrowing, which reduces the convenience yield today. The feedback loop between the convenience yield and future debt supply amplifies the effect of fiscal shocks. We further verify this channel using empirically constructed exogenous deficit shocks.

Using a sample of Chinese firms from 2000 to 2018, we document that hometown firms (firms with hometown chairpersons) engage in less green innovation than non-hometown firms. Evidence suggests that local stakeholders offer hometown chairpersons more protection from environmental consequences than non-hometown chairpersons. We identify two possible mechanisms: government patronage and accommodation by local supply chain partners. Furthermore, we find that the double standards are alleviated with insignificant difference in corporate green innovation when non-hometown chairpersons marry hometown spouses or build local political relationships. Additional analyses suggest that (1) the double standards drive hometown firms to emit more pollutants than non-hometown firms, (2) when a firm is under government scrutiny for environmental issues, located in the city with severe air pollution, or in heavily polluting industries, the adverse effect of a chairperson's hometown on green innovation is minimal, and (3) our findings on green innovation also extend to a decrease in the number of pollutant treatment facilities and treatment capacity in a firm.

We analyze transaction-level data on institutional trading and examine information flows around CEO turnovers. We find that institutional trading prior to a CEO turnover is positively related to the nature of a CEO turnover (forced versus voluntary). We further find that institutions produce information partly by analyzing insider trading prior to a CEO turnover, though they are able to produce additional information independently as well. Finally, we find that trading by institutions after a forced CEO turnover with an insider as successor CEO is positively related to subsequent long-run stock returns, and realizes significant abnormal trading profits. Overall, our results are consistent with the notion that information production by institutions, and their trading making use of this information, improves the information environment around CEO turnovers.

ABSTRACT: We investigate the association between errors in management forecasts of subsequent year earnings and current year accruals. In an uncertain operating environment, managers' assessments of their firms' business prospects are imperfect. Since managers' imperfect business assessments influence both accruals generation and earnings projection, we hypothesize that management earnings forecasts exhibit greater optimism (pessimism) when accruals are relatively high (low). Consistent with this hypothesis, we find a positive association between management earnings forecast errors and accruals. This positive association is stronger for firms operating in a more uncertain business environment and for firms in industries exhibiting greater covariation between accruals and growth-related activities. Moreover, this positive association is significant when accruals likely reflect managers' true beliefs about firms' business prospects, but is nonexistent when accruals are likely manipulated to boost managers' trading gains. Supplementary analysis reveals that the presence of management earnings forecasts does not significantly reduce accrual mispricing.

We develop a continuous-time asset allocation model to investigate the effects of mean-reverting stock returns on investors with Prospect Theory (PT) preferences. Our semi-analytical solution facilitates a comprehensive exploration of how the stock investment of PT investors may differ when accounting for mean reversion. We find that incorporating mean reversion attenuates the distinct V-shaped demand pattern in relation to contemporaneous prices, which is more pronounced when mean reversion is absent, by significantly reducing PT investors’ stock demand following price increases. This shift leads to a stock demand profile that demonstrates an inverse relationship with stock prices. In line with this change, we also show that combining PT utility with mean reversion predicts short-term contrarian behavior and the disposition effect more reliably than benchmark models that incorporate either PT utility or mean-reverting returns alone.