One sentence summaries
Grundy, Verwijmeren, Yang (2024), Intermediary frictions and convertible bond pricing, Journal of Financial Intermediation
Prices of convertible securities reflect convertible arbitrageurs’ hedging costs
Gargano, Sotes-Paladino, Verwijmeren (2023), Short of capital: Stock market implications of short sellers' losses, Management Science
Short sellers are constrained by their losses, but this doesn’t make markets less efficient
Verwijmeren, Wang, Xia (2023), The corporate investment benefits of mutual fund dual holdings, Journal of Financial and Quantitative Analysis
Firms make more valuable investments when mutual funds hold both debt and equity in the firm
van Bekkum, Grundy, Verwijmeren (2023), The importance of sovereign reference rates for corporate debt issuance: Mind the gap, Review of Finance
Sovereign debt issuance facilitates corporate debt issuance
Lewis, Munyan, Verwijmeren (2023), Convertible debt arbitrage crashes revisited, Journal of Financial and Quantitative Analysis
Convertible bond sellers found ways to avoid selling at fire sale prices during the 2008 arbitrage crash
Gargano, Sotes-Paladino, Verwijmeren (2023), Out of sync: Disagreement among short sellers and the correction of mispricing, Journal of Financial and Quantitative Analysis
Synchronization problems among short sellers leads to a delay in overpricing correction
Lee, Verwijmeren, Wang (2023), How do options add value? Evidence from the convertible bond market, Review of Finance
The costs of issuing convertible bonds are lower for firms that have traded options
Veenman, Verwijmeren (2022), The earnings expectations game and the dispersion anomaly, Management Science
The earnings surprise game between firms and analysts explains why firms with low dispersion in earnings forecasts have relatively high returns
Aleksanyan, Hao, Vagenas-Nanos, Verwijmeren (2021), Do state visits affect cross-border mergers and acquisitions? Journal of Corporate Finance
When heads of state visit a country, mergers and acquisitions follow
Adams, Kraussl, Navone, Verwijmeren (2021), Gendered prices, Review of Financial Studies
Culture is a source of pricing bias as art by female painters sells for less, especially when country-level gender inequality is high
Dutordoir, Vagenas-Nanos, Verwijmeren, Wu (2021), A rundown of merger runups, Financial Management
There is a drastic drop in stock run-ups of U.S. target firms preceding acquisition announcements, which is largely due to more stringent insider trading regulation
Grundy and Verwijmeren (2020), The external financing of investment, Journal of Corporate Finance
The principal determinant of the financing choice is whether the payoffs result from a hit-or-miss investment
Guidi, Sogiakas, Vagenas-Nanos, Verwijmeren (2020), Spreading the sin: An empirical assessment from corporate takeovers, International Review of Financial Analysis
Investing in socially undesirable activities is costly, even from a shareholder wealth maximization perspective
Verwijmeren and Yang (2020), The fluctuating maturities of convertible bonds, Journal of Corporate Finance
Recently issued convertible bonds come with short maturities that serve as substitutes for call provisions
Renjie and Verwijmeren (2020), Director attention and firm value, Financial Management
Distracted directors destroy value
Veld, Verwijmeren, Zabolotnyuk (2020), Wealth effects of seasoned equity offerings: A meta-analysis, International Review of Finance
On average, stock prices fall when an equity issue is announced, but there is a lot of heterogeneity
Adams, Akyol, Verwijmeren (2018), Director skill sets, Journal of Financial Economics
Directors are multi-dimensional and commonality in their skill sets improves firm performance
Veenman and Verwijmeren (2018), Do investors fully unravel persistent pessimism in analysts' earnings forecasts? The Accounting Review
No, they do not.
Van Marle and Verwijmeren (2017), The long and the short of convertible arbitrage, Journal of Empirical Finance
Most convertible arbitrageurs hold their positions for less than a year
Grundy and Verwijmeren (2018), The buyers’ perspective on security design: Hedge funds and convertible bond call provisions, Journal of Financial Economics
Security design reflects the interplay of the preferences of issuers and buyers
Siganos, Vagenas-Nanos, Verwijmeren (2017), Divergence of sentiment and stock market trading, Journal of Banking and Finance
Siganos, Vagenas-Nanos, Verwijmeren (2014), Facebook’s daily sentiment and international stock markets, Journal of Economic Behavior & Organization
Sentiment on Facebook is relevant for stock markets
Akyol, Raff, Verwijmeren (2017), The elimination of broker voting in director elections, Finance Research Letters
Akyol, Lim, and Verwijmeren (2012), Shareholders in the boardroom: Wealth effects of the SEC’s rule to facilitate director nominations, Journal of Financial and Quantitative Analysis
Akyol, Lim, and Verwijmeren (2012), Governance characteristics and the market reaction to the SEC’s proxy access rule, International Review of Finance
Shareholder empowerment does not automatically create value
Berkman, McKenzie and Verwijmeren (2017), Hole in the wall: Informed short selling ahead of private placements, Review of Finance
There is a substantial amount of insider trading before the announcements of private placements
Korteweg, Kraussl, and Verwijmeren (2016), Does it pay to invest in art? A selection-corrected returns perspective, Review of Financial Studies
Do not randomly invest in paintings!
Duyvesteyn, Martens, Verwijmeren (2016), Political risk and expected government bond returns, Journal of Empirical Finance
Bond prices only slowly adapt to changes in political risk
Dutordoir, Li, Liu, Verwijmeren (2016), Convertible bond announcement effects: Why is Japan different? Journal of Corporate Finance
It is beneficial for security issuers to be explicit about the intended use of proceeds
Grundy and Verwijmeren (2016), Disappearing call delay and dividend-protected convertible bonds, Journal of Finance
Call delay has disappeared, which shows that practitioners pay attention to finance theory
Grundy, Veld, Verwijmeren, Zabolotnyuk (2014), Announcement effects of convertible bond calls: Dividend protection and hedge funds, Journal of Corporate Finance
Duca, Dutordoir, Veld, and Verwijmeren (2012), Why are convertible bond announcements associated with increasingly negative abnormal stock returns? Journal of Banking and Finance
De Jong, Dutordoir, Van Geneugten, Verwijmeren (2012), Convertible arbitrage price pressure and short sales constraints, Financial Analysts Journal
Trading by arbitrageurs (temporarily) drives down stock prices
Lewis and Verwijmeren (2014), Cash-settled convertible bonds and the value relevance of their accounting treatment, Journal of Corporate Finance
Lewis and Verwijmeren (2011), Convertible security design and contract innovation, Journal of Corporate Finance
Firms really care…
…about their reported earnings per share
Brown, Grundy, Lewis, and Verwijmeren (2013), Hedge fund involvement in convertible securities, Journal of Applied Corporate Finance
Brown, Grundy, Lewis, and Verwijmeren (2012), Convertibles and hedge funds as distributors of equity exposure, Review of Financial Studies
Convertible arbitrageurs buy about three-quarter of convertible bond issues and can be used as low-cost distributors of equity exposure
Akyol and Verwijmeren (2013), Human capital costs, firm leverage, and unemployment rates, Journal of Financial Intermediation
Firms with higher leverage pay their employees higher wages
Grundy, Lim, and Verwijmeren (2012), Do option markets undo restrictions on short sales: Evidence from the 2008 short sale ban, Journal of Financial Economics
Option strategies did not substitute for short sales during the 2008 short-sale ban as option volume decreased and bid-ask spreads increased
De Jong, Verbeek, and Verwijmeren (2012), Does financial flexibility reduce investment distortions? Journal of Financial Research
Firms preserve debt capacity to reduce future investment distortions
De Jong, Dutordoir, and Verwijmeren (2011), Why do convertible issuers simultaneously repurchase stock? An arbitrage-based explanation, Journal of Financial Economics
Convertible issuers simultaneously repurchase stock to mitigate the price pressure from convertible arbitrage
De Jong, Jiang, and Verwijmeren (2011), Strategic debt in vertical relations: Evidence from franchising, Journal of Retailing
Franchisors impose limits on franchisees’ debt levels to increase their own leverage
De Jong, Verbeek, and Verwijmeren (2011), Firms’ debt-equity choices when the pecking order theory and the static tradeoff theory disagree, Journal of Banking and Finance
The pecking order theory is a better descriptor of firms’ issue decisions, whereas static tradeoff theory better predicts repurchase decisions
Jennen and Verwijmeren (2010), Agglomeration effects and firm performance, Urban Studies
For a typical single-establishment Dutch firm, the costs of settling in a dense area outweigh the benefits
De Jong, Verbeek, and Verwijmeren (2010), The impact of financing surpluses and large financing deficits on tests of the pecking order theory, Financial Management
The sign and size of financing deficits are extremely important for capital structure tests
Verwijmeren and Derwall (2010), Employee well-being, leverage, and bankruptcy costs. Journal of Banking and Finance
Firms that care about employee well-being reduce debt levels to decrease the chance of bankruptcy
De Jong and Verwijmeren (2010), To have a target debt ratio or not: what difference does it make? Applied Financial Economics
Pecking order firms contaminate static tradeoff theory-based estimations
De Jong, Rosellón, Verwijmeren (2006), The economic consequences of IFRS: The impact of IAS 32 on preference shares in the Netherlands, Accounting in Europe
Accounting changes have real economic consequences