- "Turning Local: Home-bias dynamics of relocating foreigner" w/ Bjarne Florentsen (CBS), Peter Raahauge (CBS) and Jesper Rangvid (CBS). October 2016. See coverage in Danish media: Berlingske, Børsen, Pengenyt.
Using a comprehensive dataset including the total adult population of a county (Denmark), in aggregate approximately 4.3 million individuals per year, we study private investors' preferences for domestic stocks. We compare the equity home bias of foreigners recently relocated to Denmark to the equity home bias of other investors. We find that home bias of recently relocated foreigners is lower than home bias of other investors. Our main result is that when relocated foreigners' duration of stay increases, their home bias also increases. After 7-8 years, home bias of relocated foreigners does not differ from home bias of other investors. We discuss implications for explanations of the home-bias puzzle.
- "Hurting without Hitting: The Economic Cost of Political Tension" w/ Yinghua He (Rice University) and Yonglei Wang (Huazhong Univ. of Science and Technology). March 2017.
Political tension causing diplomatic strains rarely escalates into direct violence or war. This paper identifies the economic effects of such non-violent political tension by examining Taiwan’s sovereignty debate. Non-violent events harming the relationship with mainland China lead to an average daily drop of 200 basis points in Taiwanese stock returns. The impact is more severe on firms openly supporting the Taiwanese pro-independence party. Through a series of tests we identify this economic penalty as initiated by mainland authorities, who specifically target political opponents that are economically exposed to mainland China via either investments or exports.
- "The Signalling Value of Education across Genders" w/ Herdis Steingrimsdottir (Copenhagen Business School). March 2017.
This study examines gender discrimination and the possibility that education is more important for signaling ability among women than men. As social networks tend to run along gender lines and managers in the labor market are predominantly male, it may be more difficult for women to signal their ability without college credentials. The Lang and Manove (2011) model of racial discrimination and educational sorting is applied to examine the gender gap in schooling attainment. The model is empirically estimated for whites, blacks and Hispanics separately, where the results among whites are consistent with education being more valuable to women due to signaling. For 90% of the whites in the sample women choose a higher level of education given their ability than men. Women on average obtain 0.5 - 0.7 extra years of schooling compared to men with the same ability score.
- "Proximity and IPO Underpricing", w/ Dariusz Wójcik, Journal of Corporate Finance, vol. 38, 2016.
Rural firms are less underpriced than urban firms, consistent with strong local bias in rural areas.
- "Subscribing to Transparency", w/ Yinghua He, Hong Guo and Jiong Yang, Journal of Banking and Finance, vol. 44, 2014.
The empirical relationship between trade transparency and liquidity is non-monotonic, explaining why transparency effects vary in existing empirical literature.
- "Do Less Regulated Markets Attract Lower Quality Firms? Evidence from the London AIM market", Journal of Financial Intermediation, vol. 22 (3), 2013.
AIM listed firms are of the same quality level as firms listed on more regulated markets, albeit smaller in size.
- "Stock Exchange Merger and Liquidity: The Case of Euronext", Journal of Financial Markets, vol. 12 (2), 2009.
The Euronext merger increased liquidity, but only for big and international firms.