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We study the trading of individual investors using transaction data and identifying buyer- or seller-initiated trades. We document four results: (1) Small trade order imbalance correlates well with order imbalance based on trades from retail brokers. (2) Individual investors herd. (3) When measured annually, small trade order imbalance forecasts future returns; stocks heavily bought underperform stocks heavily sold by 4.4 percentage points the following year. (4) Over a weekly horizon, small trade order imbalance reliably predicts returns, but in the opposite direction; stocks heavily bought one week earn strong returns the subsequent week, while stocks heavily sold earn poor returns.

This paper uses the 1991 Indian trade liberalization to measure the impact of trade liberalization on poverty, and to examine the mechanisms underpinning this impact. Variation in sectoral composition across districts and liberalization intensity across production sectors allows a difference-in-difference approach. Rural districts, in which production sectors more exposed to liberalization were concentrated, experienced slower decline in poverty and lower consumption growth. The impact of liberalization was most pronounced among the least geographically mobile at the bottom of the income distribution, and in Indian states where inflexible labor laws impeded factor reallocation across sectors.

This paper documents a close link between mispricing and liquidity by investigating stocks with high analyst disagreement. Previous research finds that these stocks tend to be overpriced, but that prices correct downwards as uncertainty about earnings is resolved. Our analysis suggests that one reason mispricing has persisted through the years is that analyst disagreement coincides with high trading costs. We also show that in the cross-section, the less liquid stocks tend to be more severely overpriced. Additionally, increases in aggregate market liquidity accelerate the convergence of prices to fundamentals. As a result, returns of the initially overpriced stocks are negatively correlated with the time series of innovations in aggregate market liquidity.

We examine security analysts' career concerns by relating their earnings forecasts to job separations. Relatively accurate forecasters are more likely to experience favorable career outcomes like moving up to a high-status brokerage house. Controlling for accuracy, analysts who are optimistic relative to the consensus are more likely to experience favorable job separations. For analysts who cover stocks underwritten by their houses, job separations depend less on accuracy and more on optimism. Job separations were less sensitive to accuracy and more sensitive to optimism during the recent stock market mania. Brokerage houses apparently reward optimistic analysts who promote stocks.

Indian society suffers from substantial inequalities in education, employment, and income based on caste and ethnicity. Compensatory or positive discrimination policies reserve 15% of the seats in institutions of higher education and state and central government jobs for people of the lowest caste, the Scheduled Caste; 7.5% of the seats are reserved for the Scheduled Tribe. These programs have been strengthened by improved enforcement and increased funding in the 1990s. This positive discrimination has also generated popular backlash and on-the-ground sabotage of the programs. This paper examines the changes in educational attainment between various social groups for a period of nearly 20 years to see whether educational inequalities have declined over time. We use data from a large national sample survey of over 100,000 households for each of the four survey years-1983, 1987-1988, 1993-1994, and 1999-2000-and focus on the educational attainment of children and young adults aged 6-29. Our results show a declining gap between dalits, adivasis, and others in the odds of completing primary school. Such improvement is not seen for Muslims, a minority group that does not benefit from affirmative action. We find little improvement in inequality at the college level. Further, we do not find evidence that upper-income groups, the so-called creamy layer of dalits and adivasis, disproportionately benefit from the affirmative action programs at the expense of their lower-income counterparts.

Outsourcing of labor services grew substantially during the 1980s and 1990s and was associated with lower wages, fewer benefits, and lower rates of unionization. The authors focus on two occupations for which they can identify outsourcing in those two decades using industry and occupation codes: janitors and guards. Across a wide array of specifications, they find that the outsourcing wage penalty ranged from 4% to 7% for janitors and from 8% to 24% for guards. Their findings on health benefits mirror those on wages. Evidence suggests that the outsourcing penalty was not due to compensating differentials for higher benefits or lower hours, skill differences, or the types of industries that outsourced. Rather, outsourcing seems to have reduced labor market rents for workers, especially for those in the upper half of the occupational wage distribution. Industries with higher historical wage premia were more likely to outsource service work.

We estimate the impact of bank merger announcements on borrowers' stock prices for publicly traded Norwegian firms. Borrowers of target banks lose about 0.8% in equity value, while borrowers of acquiring banks earn positive abnormal returns, suggesting that borrower welfare is influenced by a strategic focus favoring acquiring borrowers. Bank mergers lead to higher relationship exit rates among borrowers of target banks. Larger merger-induced increases in relationship termination rates are associated with less negative abnormal returns, suggesting that firms with low switching costs switch banks, while similar firms with high switching costs are locked into their current relationship.

We analyze the effect of industry, region, and time on new business survival rates by means of a multi-dimensional approach. The data relate to West German districts in the 1983-2000 period. The survival chances of start-ups tend to be relatively low in industries characterized by a high minimum efficient size and high numbers of entries. We find that regional characteristics play a rather important role and that introducing the regional dimension leads to considerable improvements of the estimation results. The significance of the regional dimension is also reflected in a remarkably high level of neighborhood effects.

Adopting an institutional lens, this paper examines the interaction between different levels of legal, normative and cultural-cognitive institutions on the level of innovation associated with the choice of alliance governance mechanism as equity or contractual. Using patent data, this paper undertakes multilevel modelling of 314 technology alliance portfolios located in Europe, North America and the Asia-Pacific region. Key findings indicate normative and cultural-cognitive institutions do affect the performance outcomes of alliances. Equity alliances provide supporting mechanisms that quell fears about organizational risk in alliances under conditions of uncertainty avoidance as the dominant cultural-cognitive frame, and hence contribute to better innovation performance. Contractual alliances are associated with higher levels of innovation under normative contexts that value collectivism rather than individualism. Contrary to expectation, the results do not support the literature of a fit between equity alliances and weak intellectual property rights protection on innovation. However, the presence of highly formalized legal processes for enforcing contracts is associated with higher levels of innovation from alliances.

The Ontario Child Health Study provides the first opportunity in Canada to assess directly the relationship between socio-economic and health status in childhood and levels of completed schooling, health status, and labour market success in young adulthood. We find that childhood health problems are negatively associated with educational attainment, especially the probability of a university degree, and the health status of young adults. Our results also imply that childhood health problems influence adult labour force outcomes, especially for males, mainly through adult levels of schooling and health. /// L'Étude sur la santé des jeunes Ontariens fournit une première opportunité au Canada d'évaluer directement la relation entre le statut sanitaire et socio-économique des enfants et les niveaux d'éducation complétés, le statut sanitaire des jeunes adultes, et leur degré de succès dans le marché du travail. Il appert que des problèmes de santé chez les enfants ont un lien négatif avec le niveau d'éducation complété, et en particulier avec la probabilité d'un grade universitaire, ainsi qu'avec le statut sanitaire des jeunes adultes. Voilà qui implique que les problèmes de santé des enfants influent sur leurs résultats dans le monde du travail, en particulier pour les garçons, à cause de leur impact sur le niveau d'éducation et de santé de ces enfants devenus adultes.