Companies that invest more or grow their total assets more are likely to experience a strange result: lower risk-adjusted returns. This outcome is called the investment or asset growth anomaly and it has attracted interest from researchers seeking an explanation. Two different schools of thought have emerged, one behavioral and the other rational. The ... Read More

Electronic healthcare systems have the potential to improve patient care and save money. In the U.S. alone it is estimated such systems could save $77 billion if implemented properly, and the government has a goal of making all medical records electronic and standardized by 2014. But just because an e-healthcare system is in place does not mean it will be ... Read More

A challenge for financial analysts and investors is teasing out how the stock returns of individual firms move with the changing conditions of their industry, and whether some are more sensitive to industry-wide news than others. Shengquan Hao, Qinglu Jin and Guochang Zhang explore this question by looking at the role of relative profitability in determining ... Read More

Unemployment is an emotional and negative experience that disrupts not only a person's income, but also their routine, identity and daily social connections. But what happens next, when the job search starts? While there has been considerable research interest in this topic, most of it has focused on a specific moment in time. Yet the job search can extend ... Read More

Clawback provisions allow firms to recover compensation from corporate executives involved in accounting improprieties. But are they a deterrent? Do they improve financial reporting? These are important questions at a time when executive compensation is under the microscope. Lilian H. Chan, Kevin C.W. Chen, Tai-Yuan Chen and Yanxin Yu have been investigating ... Read More

One of the primary functions of markets is to aggregate information to help investors make investment decisions. This aggregation, however, is usually imperfect as evidenced in the dispersion of market prices. But the advent of Wikipedia may be shaking that up. Wikipedia allows users to not only consume but contribute information, thus providing a platform ... Read More

Analysts are very important in the investment process. Investors pay hundreds of millions of dollars for their recommendations and forecast data so there is understandably keen interest in identifying the better performing analysts. Two measures with a high profile are the annual rankings by Institutional Investor (II) and the Wall Street Journal (WSJ). Both ... Read More

In 2009 Apple increased the price of its best-selling iTunes tracks from 99 cents to $1.29, triggering a more enduring than expected sales decline. What did the company do wrong? For one thing, it may have gone too far too soon in increasing prices, according to research by Javad Nasiry and Ioana Popescu. They looked at dynamic pricing when there are loss ... Read More

In today's globalised world, investors are often advised to hold a combination of domestic and foreign equity to spread out and balance their risk. However, numerous reports have shown a bias towards home equity as a result of either institutional barriers or investor behavior. What has not been clear is how home bias affects asset pricing in equilibrium ... Read More