Leading the herd: evidence from mutual funds’ buy and sell decisions

This article investigates whether a mutual fund’s performance is related to its herding behavior. Using the methodology of Sias (Rev Finance Stud 17:165–206, 2004), we develop a measure to capture the magnitude that a fund’s buy (sell) decisions are leading other funds’ buys (sells), and find that a fund’s performance is positively (negatively) related to its “buy leading” (“sell leading”). We interpret these findings as evidence that “buy leaders” (“sell leaders”)’ performance benefits (suffers) from the positive (negative) price effect associated with buy (sell) herds. Additionally, we find a positive relationship between fund performance and valuation-motivated “buy leading”, while we find weak evidence on the relationship between performance and valuation-motivated “sell leading”. We interpret these results as evidence that leading funds’ outperformance is due, in part, to their ability to value stocks.     

Co‐managers,Information, and the Secondary Market Liquidity of Initial Public Offerings

We provide evidence that co‐managers improve initial public offering (IPO) liquidity through the “information” services they provide. Based on a sample of IPOs completed from January 1993 to December 2005, we find that a high number of co‐managers in the syndicate are associated with a lower spread, lower adverse selection costs, and a lower probability of informed trading. Moreover, increases in the offer price revision, in co‐managers’ underwriting rank, and in the number of analyst recommendations are all associated with the improvement in liquidity. This evidence is consistent with the hypotheses that co‐managers’ premarket and postmarket services mitigate information risk in the aftermarket.     

Zipf’s law—another view

In many scientific disciplines phenomena are observed which are usually described using one of the various versions of the so-called Zipf’s Law. As no single formula could be found so far which would be able to sufficiently fit to all data more and more variants (modifications, ad-hoc formulas, derivations etc.) are created, each of which agrees quite well with some given data sets but fail with others. The present paper proposes a new approach to the problem, based on the assumption that every data set which displays a Zipf-like structure is composed of several system components. A corresponding model is presented and tested on data from 100 texts from 20 languages.     

The implied intra-day probability of informed trading

The paper develops a methodology for estimating the intra-day probability of informed trading for NYSE stocks, implied by the specialist’s quotes and depths. The time series pattern of our measure (PROBINF) in an intra-day analysis around earnings announcements is consistent with previous findings and with expectations regarding informed trading. Moreover, we find that PROBINF exhibits a strong and robust relationship with PIN, the level of insider trading and with measures of the price impact of trades. Our methodology complements the one developed in Easley et al. (J Financ 51(3):811–833, 1996a, J Financ 51(4):1405–1436, b), as it can be used to measure short term changes in informed trading and information asymmetry around events such as merger and acquisition announcements, share repurchases, stock splits, dividend announcements and index additions and deletions.     

Discussing the political survival of Romanian ministers since 1989—Do economic conditions matter?

Political longevity in young democracies has attracted the attention of scholars and practitioners alike due to several particular characteristics of such democracies, such as a low level of trust, a low level of credibility, corruption, economic difficulties, a less well‐established rule of law and an increased bureaucracy. In such a context, we studied the tenure duration of Romanian ministers since 1989, as well as their accumulated political longevity in ministerial offices. Using proportional hazards regression, we observed some peculiarities in the young Romanian democracy in comparison with more established regimes. We observed that left‐wing majorities tend to increase the probability of seat changes and thus diminish tenure longevity. We also observed that good economic conditions may lead to the substitution of certain types of ministries, while higher inflation rates tend to shorten tenure longevity for Romanian ministers. Moreover, our estimations support the finding that Romanian ministers tend to have shorter tenures as the number of past ministerial functions increases and that the burden of simultaneously managing various ministries significantly contributes to the shorter political longevity of a given minister. Finally, recent ministers have had longer tenures than those in the first years after the fall of communism in Eastern Europe in 1989.     

The Romanian researchers＇ profile and career in the knowledge based economy

This study examines the international profile and career of 157 Romanian researchers. The majority considers the insufficient funding of research in Romania as playing a major role in their decision to work in the knowledge based economy. In addition, the survey reveals several other factors which motivate the emigration of Romanian scientists. While abroad, the majority kept in touch with their former university/research institute, colleagues and/or the Romanian scientific community, in general. More than half of the respondents prefer to work outside Romania, after completing their current professional projects.     

Diaspora Geopolitics: Romanian-Americans and NATO Expansion

Recent years have witnessed increased interest in diasporas. In the current context of globalisation, diasporas have assumed greater prominence on the international stage. The link between diasporas and international politics, however, is relatively under-studied. The purpose of this study is to analyse the interconnections between diasporas and international politics from a geopolitical perspective. Specifically, I examine the linkages between the US-based Romanian diaspora and US foreign policy regarding Romania during the late 1990s when NATO expanded into Eastern Europe. The US-based Romanian diaspora attempted to influence the US political establishment to grant NATO membership to Romania during NATO’s 1997 expansion by reshaping the prevailing geopolitical discourse about Romania in order to move the borders of ‘sameness’ to include Romania as similar to rather than apart from ‘the West’.     

Corruption and Banking Stability: Evidence from Emerging Economies

This article investigates the effect of corruption on banking stability using data from banks in emerging markets. The analysis first reveals that a lower level of corruption had a positive impact on bank stability and is associated with fewer credit losses and with more moderate credit growth. It then highlights the importance of bank and country characteristics in identifying the asymmetric effects of corruption on bank stability. Our evidence suggests that stability of banks that are acting in a country that has not adopted a corporate governance code or is not a member of the European Union is affected more by the corruption. Also, in countries with higher levels of corruption banks could increase their stability if they implement rigorous corporate governance practices.