Although most shareholders hold diversified portfolios, the corporate finance literature postulates that shareholders maximise firm value, while managers sometimes do not. We argue to the contrary that undiversified managers may care more about firm-level risk and return than about the value of...

Privately informed owners securitizing assets signal positive information by retaining sufficient interest. Signaling provides social benefits, allowing uninformed investors to insure without fearing adverse selection. Instead of signaling, owners of high value assets may prefer a pooling...

This paper analyses the effects of labor intensity on a firm's operating risk and its expected stock returns. We isolate a pure labor intensity effect by using a relative measure with respect to the three-digit industry median level. We show that labor intensity is positively associated with...

Reviews the book 'Financial Analysis and Corporate Strategy,' by Mark Grinblatt and Sheridan Titman.