Are airlines' price-setting strategies different?

Using a sample of fare quotes for non-stop travel from New York to London, this paper documents a set of stylized facts about pricing strategies of air carriers on this route. Two key facts stand out. First, airlines appear to employ strikingly different pricing strategies. Second, fares increase at an accelerated rate as the departure date approaches.     

On the investment sensitivity of debt under uncertainty

We investigate the impact of debt on a panel of U.S. manufacturing firms' capital investment behavior as the underlying firm-specific and market-level uncertainty changes. Our estimates show that the influence of leverage on capital investment may be stimulating or mitigating depending on the effects of uncertainty.     

The impact of macroeconomic uncertainty on non-financial firms' demand for liquidity

This paper empirically investigates whether changes in macroeconomic volatility affect the efficient allocation of non-financial firms' liquid assets. We argue that higher uncertainty will hamper managers' ability to accurately predict firm-specific information and induce them to implement similar cash management policies. Contrarily, when the macroeconomic environment becomes more tranquil, each manager will have the latitude to behave more idiosyncratically as she can adjust liquid assets based on the specific requirements of the firm, bringing about a more efficient allocation of liquid assets. Our empirical analysis provides support for these predictions.     

Self-employment,financial development,and well-being: Evidence from China,Russia, and Ukraine

This study investigates the association between financial development and entrepreneurs’ well-being in China, Ukraine, and Russia. We find that Chinese and Russian entrepreneurs have a higher level of well-being, while Ukrainian self-employed individuals have more dissatisfaction. The link between financial development and the utility of entrepreneurs varies as well. The utility differences between the self-employed and paid workers in Russia reduce with financial development and the effect is stronger for job satisfaction. However, financial development barely correlates with Ukrainian entrepreneurs’ happiness while having no correlation with life satisfaction of Chinese self-employed. Further investigation suggests that the financial development – entrepreneurial utility association works through both monetary and non-monetary channels.     

Social media and price discovery: The case of cross-listed firms

In this article, we examine whether social media information affects the price-discovery process for cross-listed companies. Using over 29 million overnight tweets mentioning cross-listed companies, we examine the role of social media for a link between the last periods of trading in the US markets and the first periods in the UK market. Our estimates suggest that the size and content of information flows on social networks support the price-discovery process. The interactions between lagged US stock features and overnight tweets significantly affect stock returns and volatility of cross-listed stocks when the UK market opens. These effects weaken and disappear 1 to 3 hr after the opening of the UK market. We also develop a profitable trading strategy based on overnight social media, and the profits remain economically significant after considering transaction costs.     

Policy innovation through noise in implementation: Best to be grey (or silver) on Friday,in Halifax

When the implementation of regulations requires judgement, there is bound to be noise in the application of the rules, but is there bias in the noise such that policy innovation, in effect, occurs in implementation? We use a recently available large postcode data set on the MOT road safety testing in the UK to answer this question. There is significant bias: the probability of failing varies systematically across postcodes, day of the week and vehicle colour. A national policy is undermined by this variability and we suggest how policy might be adjusted to reduce this unintended policy innovation.