Urban Vibrancy and Corporate Growth DOUGAL, CASEY; PARSONS, CHRISTOPHER A.; TITMAN, SHERIDAN
The Journal of finance (New York),
February 2015, Volume:
70, Issue:
1
Journal Article
Peer reviewed
We find that a firm's investment is highly sensitive to the investments of other firms headquartered nearby, even those in very different industries. A firm's investment also responds to fluctuations ...in the cash flows and stock prices (q) of local firms outside its sector. These patterns do not appear to reflect exogenous area shocks such as local shocks to labor or real estate values, but rather suggest that local agglomeration economies are important determinants of firm investment and growth.
The Geography of Value Creation Dougal, Casey; Parsons, Christopher A; Titman, Sheridan
The Review of financial studies,
08/2022, Volume:
35, Issue:
9
Journal Article
Peer reviewed
Abstract
Over the last 20 years, the stock market indicates that value creation has become heavily concentrated in a few headquarter cities. At the same time, firms in value-creating cities have ...experienced declines in their profitability, because of large increases in wages and rents. Our findings thus highlight the difference between flow-based (e.g., operating profits) and stock-based (e.g., securities prices) indicators of local productivity. Conventional proxies for a city’s appeal to high value-added workers, such as education rates and weather, are positively related to stock market valuations, but negatively related to near-term operating performance.
Journalists and the Stock Market Dougal, Casey; Engelberg, Joseph; García, Diego ...
The Review of financial studies,
03/2012, Volume:
25, Issue:
3
Journal Article
Peer reviewed
We use exogenous scheduling of Wall Street Journal columnists to identify a causal relation between financial reporting and stock market performance. To measure the media's unconditional effect, we ...add columnist fixed effects to a daily regression of excess Dow Jones Industrial Average returns. Relative to standard control variables, these fixed effects increase the R² by about 35%, indicating each columnist's average persistent "bullishness" or "bearishness." To measure the media's conditional effect, we interact columnist fixed effects with lagged returns. This increases explanatory power by yet another one-third, and identifies amplification or attenuation of prevailing sentiment as a tool used by financial journalists.
Historically black colleges and universities (HBCUs) pay higher underwriting fees to issue tax-exempt bonds, compared with similar non-HBCUs, apparently reflecting higher costs of finding willing ...buyers. The effect is three times larger in the Deep South, where racial animus remains the most severe. Credit quality plays little role. For example, identical differences are observed between HBCU and non-HBCUs with AAA ratings or when insured by the same company, even before the 2007–2009 financial crisis. HBCU-issued bonds are also more expensive to trade in secondary markets and, when they do, sit in dealer inventory longer.
•We examine the response of public and private firms to investment opportunities measured at the industry and area level.•Public firms are more sensitive than private firms to new industry-level ...investment opportunities•Private firms are more sensitive than public firms to new local investment opportunities.•Private firms’ greater sensitivity to local signals is driven by their greater investment home bias.•Private firm local investments are more profitable than comparable investments by public firms.
Are public firm investment rates more sensitive than private firm rates to new investment opportunities? We offer a new explanation for differences in public and private firm investment sensitivities: investment sensitivities differ because the type of investments favored by firms varies with their listing status. Specifically, we consider the geography of investment opportunities and find that private firms have a much stronger investment home-bias than similar public firms which makes their investment decisions more sensitive to local investment opportunities than public firms. Controlling for local investment opportunities explains four-fifths of the differential sensitivity between public and private firms not explained by more traditional measures of investment opportunities.
Anchoring on Credit Spreads DOUGAL, CASEY; ENGELBERG, JOSEPH; PARSONS, CHRISTOPHER A. ...
The Journal of finance (New York),
June 2015, Volume:
70, Issue:
3
Journal Article
Peer reviewed
This paper documents that the path of credit spreads since a firm's last loan influences the level at which it can currently borrow. If spreads have moved in the firm's favor (i.e., declined), it is ...charged a higher interest rate than is justified by current fundamentals, whereas if spreads have moved to the firm's detriment, it is charged a lower rate. We evaluate several possible explanations for this finding, and conclude that anchoring to past deal terms is most plausible.
I find that growth in local proprietary income is positively correlated with the future stock returns and cash flows of public firms headquartered nearby. This predictability is strongest for firms ...in high-technology industries, for firms with more localized business operations, and when proprietor financial constraints are relaxed as measured by changes in aggregate housing prices. Proprietary income growth also predicts aggregate stock prices. There exists a common proprietary income growth factor across economic regions which pro-cyclically predicts aggregate market returns. This factor is highly correlated with the Silicon Valley proprietary income growth rate—which itself is a stronger predictor of aggregate returns than the dividend yield or CAY.
Journalists and the Stock Market Dougal, Casey; García, Diego; Parsons, Christopher A ...
Review of Financial Studies,
2012, Volume:
25, Issue:
3
Journal Article
We use exogenous scheduling of Wall Street Journal columnists to identify a causal relation between financial reporting and stock market performance. To measure the media's unconditional effect, we ...add columnist fixed effects to a daily regression of excess Dow Jones Industrial Average returns. Relative to standard control variables, these fixed effects increase the R-super-2 by about 35%, indicating each columnist's average persistent "bullishness" or "bearishness." To measure the media's conditional effect, we interact columnist fixed effects with lagged returns. This increases explanatory power by yet another one-third, and identifies amplification or attenuation of prevailing sentiment as a tool used by financial journalists. The Author 2012. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.
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