Twitter investor sentiment and corporate earnings announcements

We examine the impact of firm-specific investor sentiment (FSIS) on stock returns for negative and positive earnings surprises. Using a measure constructed from firm-specific tweets, we find that FSIS has a greater impact on stock returns for negative relative to positive earnings surprises. We further show that the impact of FSIS is greater for firms whose valuation is uncertain and difficult to arbitrage. Moreover, we provide evidence of return reversals over post-announcement periods. Our results highlight the importance of FSIS around earnings announcements.     

Investor Heterogeneity and the Cross-section of U.K. Investment Trust Performance

We use the upper and lower bounds derived by Ferson and Lin (2010) to examine the impact of investor heterogeneity on the performance of U.K. investment trusts relative to alternative linear factor models. We find using the upper bounds that investor heterogeneity has an important impact for nearly all investment trusts. The upper bounds are large in economic terms and significantly different from zero. We find no evidence of any trusts where all investors agree on the sign of performance beyond what we expect by chance. Using the lower bound, we find that trusts with a larger disagreement about trust performance have a weaker relation between the trust premium and past Net Asset Value (NAV) performance.     

BOND MARKET REACTION TO STOCK REPURCHASES: IS THERE A WEALTH TRANSFER EFFECT?

We reexamine the bondholder wealth impact of stock repurchases with a focus on the wealth transfer effect. We do not detect any transfer of wealth from bondholders to shareholders surrounding open market stock repurchases. For the overall sample (1994–2002), using daily data we document a significant decrease in bond yields surrounding repurchase announcements. Subsamples classified by attributes that capture wealth transfer propensity also do not reveal evidence consistent with a wealth transfer effect. Correlation analysis between bond and stockholder wealth effects similarly is not supportive of a wealth transfer effect. Contrary to the wealth transfer hypothesis, we document a greater proportion of bond rating upgrades than downgrades in the three months following a repurchase announcement. Our results are robust to alternate bond price data and event return methodology.     

Fenced in: Common property struggles in the management of communal rangelands in central Eastern Cape Province,South Africa

This paper takes as its starting point the assertion that current rangeland management in the central Eastern Cape Province (former Ciskei) of South Africa, is characterised primarily by an ‘open-access’ approach. Empirical material drawn from three case-study communities in the region is used to examine the main barriers to management of rangeland as a ‘commons’. The general inability to define and enforce rights to particular grazing resources in the face of competing claims from ‘outsiders’, as well as inadequate local institutions responsible for rangeland management are highlighted as being of key importance. These are often exacerbated by lack of available grazing land, diffuse user groups and local political and ethnic divisions. Many of these problems have a strong legacy in historical apartheid policies such as forced resettlement and betterment planning.     

Deforestation dynamics and policy changes in Bolivia's post-neoliberal era

This work compares the effects of neoliberal and post-neoliberal land-use policies on forest cover along the Corredor Bioceánico of southeastern Bolivia to determine if rates of agriculturally driven forest clearance have changed since the Morales’ administration came to office in 2005. Satellite image analysis, supported by semi-structured interviews with farmers and representatives of key institutions, shows that deforestation for commercial agriculture in Santa Cruz continues and has increased in certain “hotspots”. Previous research has shown that the environmental effects of neoliberalism on forest cover are varied, but more broadly, reduced state intervention has meant less environmental regulation and greater deforestation, while strong government is better able to curtail deforestation. Although neoliberal policies triggered an unprecedented level of forest clearing in Bolivia, rates have generally continued to increase and can be indirectly linked to the administration's new agrarian reform and pro-environmental regulations. This trend is counterintuitive and stems from unanticipated responses such as deforestation through fire to prove productive use under the reform's socio-economic function requirements. Given increased regulation and enforcement of forest clearing and burning under Morales, in contrast to the neoliberal era, our analyses suggest that rates will continue to increase under the current political climate, which has further polarized the opposition in Santa Cruz.     

A Model of Spatial Arbitrage with Transport Capacity Constraints and Endogenous Transport Prices

This article solves a high-frequency model of price arbitrage incorporating storage and trade when the amount of trade is limited by transport capacity constraints. In equilibrium there is considerable variation in transport prices because transport prices rise when the demand to ship goods exceeds the capacity limit. This variation is necessary to attract shipping capacity into the industry. In turn, prices in different locations differ by a time varying amount. Thus while the law of one price holds, it holds because of endogenous variation in transport prices.     

The institutional context of poverty: State fragility as a predictor of cross‐national variation in commercial microfinance lending

We examine cross‐national variation in the global growth of commercial microfinance from 1998 to 2009 as a natural experiment to analyze the role of national institutions in shaping the ability of commercial enterprises to reach the global poor. Our results demonstrate that a country's level of state fragility represents an important institutional context of poverty that explains significant cross‐national variation in the commercial microfinance industry's ability to grow its client base, control costs, and attract commercial capital. Moreover, we find that commercial microfinance lenders have experienced greater difficulty than nonprofit lenders in growing their client base in more fragile state settings. Our results support the proposition that the state shapes both institutional hazards and opportunities for business‐led efforts to combat global poverty. Copyright © 2013 John Wiley & Sons, Ltd.