The Journal of Finance

COST OF PROVIDING CONSUMER CREDIT: A STUDY OF FOUR MAJOR TYPES OF FINANCIAL INSTITUTIONS*

Published: 9/1962,  Volume: 17,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1962.tb04301.x  |  Cited by: 0

Paul Smith

THE CONCEPTS OF MONEY AND COMMERCIAL BANKS

Published: 12/1966,  Volume: 21,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1966.tb00271.x  |  Cited by: 4

Paul F. Smith

OPTIMUM RATE ON TIME DEPOSITS*

Published: 12/1962,  Volume: 17,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1962.tb04336.x  |  Cited by: 0

Paul F. Smith

PRICING POLICIES ON CONSUMER LOANS AT COMMERCIAL BANKS

Published: 5/1970,  Volume: 25,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1970.tb00677.x  |  Cited by: 7

Paul F. Smith

Structural Disequilibrium and the Banking Act of 1980

Published: 5/1982,  Volume: 37,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1982.tb03560.x  |  Cited by: 0

PAUL F. SMITH

Discussion

Published: 5/1966,  Volume: 21,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1966.tb00239.x  |  Cited by: 1

Leo Grebler, Harlow D. Osborne, Paul F. Smith

Neighbors Matter: Causal Community Effects and Stock Market Participation

Published: 5/9/2008,  Volume: 63,  Issue: 3  |  DOI: 10.1111/j.1540-6261.2008.01364.x  |  Cited by: 633

JEFFREY R. BROWN, ZORAN IVKOVIĆ, PAUL A. SMITH, SCOTT WEISBENNER

This paper establishes a causal relation between an individual's decision whether to own stocks and average stock market participation of the individual's community. We instrument for the average ownership of an individual's community with lagged average ownership of the states in which one's nonnative neighbors were born. Combining this instrumental variables approach with controls for individual and community fixed effects, a broad set of time‐varying individual and community controls, and state‐year effects rules out alternative explanations. To further establish that word‐of‐mouth communication drives this causal effect, we show that the results are stronger in more sociable communities.

Further Evidence on the Value of a Priori Information

Published: 3/1980,  Volume: 35,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1980.tb03481.x  |  Cited by: 1

GARY SMITH

DISCUSSION

Published: 5/1970,  Volume: 25,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1970.tb00667.x  |  Cited by: 1

Warren Smith

Public Information, IPO Price Formation, and Long‐Run Returns: Japanese Evidence

Published: 1/23/2009,  Volume: 64,  Issue: 1  |  DOI: 10.1111/j.1540-6261.2008.01440.x  |  Cited by: 60

KENJI KUTSUNA, JANET KIHOLM SMITH, RICHARD L. SMITH

The price formation process of JASDAQ IPOs is more transparent than in the United States. The transparency facilitates analysis of important issues in the IPO literature—why offer prices only partially adjust to public information and adjust more fully to negative information, and why adjustments are related to initial returns. The evidence indicates that early price information conveys the underwriter's commitment to compensate investors for acquiring and/or disclosing information. Offer prices reflect pre‐IPO market values of public companies and implicit agreements between underwriters and issuers that originate well before the offering. Underadjustment of offer prices is substantially reversed in the aftermarket.

Evidence on the Determinants of Credit Terms Used in Interfirm Trade

Published: 6/1999,  Volume: 54,  Issue: 3  |  DOI: 10.1111/0022-1082.00138  |  Cited by: 625

Chee K. Ng, Janet Kiholm Smith, Richard L. Smith

AbstractTrade credit is created whenever a supplier offers terms that allow the buyer to delay payment. In this paper we document the rich variation in interfirm credit terms and credit policies across industries. We examine empirically the firm's basic credit policy choices: whether to extend credit or to require cash payment; and, if credit is extended, whether to adopt simple net terms or terms with discounts for prompt payment. We also examine determinants of variations in two‐part terms. Results are supportive primarily of theories that explain credit terms as contractual solutions to information problems concerning product quality and buyer creditworthiness.

ESTIMATING A GENERAL DISEQUILIBRIUM MODEL OF THE FINANCIAL SECTOR*

Published: 12/1973,  Volume: 28,  Issue: 5  |  DOI: 10.1111/j.1540-6261.1973.tb01475.x  |  Cited by: 0

Gary N. Smith

GOVERNMENT FINANCIAL AID TO SMALL BUSINESS: FISCAL POLICY

Published: 6/1951,  Volume: 6,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1951.tb04453.x  |  Cited by: 0

Dan Throop Smith

ETHICAL DRUG INDUSTRY RETURN ON INVESTMENT*

Published: 12/1974,  Volume: 29,  Issue: 5  |  DOI: 10.1111/j.1540-6261.1974.tb03149.x  |  Cited by: 0

Rodney F. Smith

THE EFFECT OF THE CORPORATE FINANCIAL PLAN ON THE CORPORATE RISK MANAGEMENT PROGRAM

Published: 5/1964,  Volume: 19,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1964.tb00772.x  |  Cited by: 1

W. B. Smith

Shareholder Activism by Institutional Investors: Evidence from CalPERS

Published: 3/1996,  Volume: 51,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1996.tb05208.x  |  Cited by: 836

MICHAEL P. SMITH

This study examines firm characteristics that lead to shareholder activism and analyzes the effects of activism on target firm governance structure, shareholder wealth, and operating performance for the 51 firms targeted by CalPERS over the 1987–93 period. Firm size and level of institutional holdings are found to be positively related to the probability of being targeted, and 72 percent of firms targeted after 1988 adopt proposed changes or make changes resulting in a settlement with CalPERS. Shareholder wealth increases for firms that adopt or settle and decreases for firms that resist. No statistically significant change in operating performance is found.

The Choice of Issuance Procedure and the Cost of Competitive and Negotiated Underwriting: an Examination of the Impact of Rule 50

Published: 7/1987,  Volume: 42,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1987.tb04580.x  |  Cited by: 23

RICHARD L. SMITH

Previous research suggests that firms choose negotiated issuance over competitive despite its apparently higher net interest cost. This result is shown to arise partly from failure to correct for a selectivity bias in the choice of issuance procedures. Two stage analysis is used in a model that includes qualitative and limited dependent variables to re‐estimate the net interest cost difference between competitive and negotiated issues. Results support the hypothesis that the choice of issuance procedure is consistent with shareholder wealth maximization. Examination of debt issues subject to Rule 50 of the Public Utility Holding Company Act indicates that the regulation, as applied, is not effective.

A TRANSITION MODEL FOR PORTFOLIO REVISION*

Published: 9/1967,  Volume: 22,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1967.tb02978.x  |  Cited by: 4

Keith V. Smith

INSTITUTIONAL ASPECTS OF INTERREGIONAL MORTGAGE INVESTMENT

Published: 5/1968,  Volume: 23,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1968.tb00811.x  |  Cited by: 3

Halbert C. Smith

THE RESPONSE OF STATE AND LOCAL GOVERNMENTS TO FEDERAL GRANT‐IN‐AID PAYMENTS*

Published: 6/1968,  Volume: 23,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1968.tb00839.x  |  Cited by: 0

David L. Smith

THE EQUAL CREDIT OPPORTUNITY ACT OF 1974: A COST/BENEFIT ANALYSIS

Published: 5/1977,  Volume: 32,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1977.tb03298.x  |  Cited by: 9

James F. Smith

SENSITIVITY ANALYSIS OF RATES OF RETURN: COMMENT

Published: 12/1978,  Volume: 33,  Issue: 5  |  DOI: 10.1111/j.1540-6261.1978.tb03433.x  |  Cited by: 1

W. James Smith

DEMAND FOR SHORT TERM GOVERNMENT DEBT*

Published: 3/1972,  Volume: 27,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1972.tb00638.x  |  Cited by: 0

Charles I. Smith

THE POSTWAR CANADIAN MORTGAGE MARKET AND THE ROLE OF GOVERNMENT*

Published: 9/1966,  Volume: 21,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1966.tb00266.x  |  Cited by: 0

Lawrence B. Smith

Trade Credit and Informational Asymmetry

Published: 9/1987,  Volume: 42,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1987.tb03916.x  |  Cited by: 641

JANET KIHOLM SMITH

Commonly used trade credit terms implicitly define a high interest rate that operates as an efficient screening device where information about buyer default risk is asymmetrically held. By offering trade credit, a seller can identify prospective defaults more quickly than if financial institutions were the sole providers of short‐term financing. The information is valuable in cases where the seller has made nonsalvageable investments in buyers since it enables the seller to take actions to protect such investments.

A Theoretic Framework for the Analysis of Credit Union Decision Making

Published: 9/1984,  Volume: 39,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1984.tb03899.x  |  Cited by: 91

DONALD J. SMITH

This paper presents a formal theoretic framework to analyze credit union interest rates on loans and savings deposits. The unique motivational and institutional features of a credit union, in particular its structure as a financial service cooperative, are used to develop the objective function. This is based on a comparison of the credit union's rates to alternatively available market rates and includes parameters to recognize the possibility of borrower‐saver conflict. The principal result is that the optimal rates and reactions to exogenous changes depend critically on the preference of the organization toward financial gain to the borrowing and saving members.

THE OUTLOOK FOR FEDERAL RESERVE AND TREASURY POLICY*

Published: 5/1959,  Volume: 14,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1959.tb01588.x  |  Cited by: 0

Warren L. Smith

DISCUSSION

Published: 5/1983,  Volume: 38,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1983.tb02277.x  |  Cited by: 1

CLIFFORD W. SMITH

AN ANALYSIS OF THE EFFECTS OF THE REMOVAL OF THE YIELD CEILING ON FEDERALLY INSURED MORTGAGES IN CANADA

Published: 3/1977,  Volume: 32,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1977.tb03254.x  |  Cited by: 0

Lawrence B. Smith

Trading Costs and Exchange Delisting: The Case of Firms that Voluntarily Move from the American Stock Exchange to the Nasdaq

Published: 12/1997,  Volume: 52,  Issue: 5  |  DOI: 10.1111/j.1540-6261.1997.tb02753.x  |  Cited by: 26

PAUL CLYDE, PAUL SCHULTZ, MIR ZAMAN

We examine 47 stocks that voluntarily left the American Stock Exchange from 1992 through 1995 and listed on the Nasdaq. We find that both effective and quoted spreads increase by about 100 percent after listing on the Nasdaq. These spread changes are consistent across stocks. In contrast, excess returns are positive when firms announce a switch from The American Stock Exchange to the Nasdaq. We are unable to explain this apparent contradiction.

Market Created Risk

Published: 7/1989,  Volume: 44,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1989.tb04378.x  |  Cited by: 28

ALAN KRAUS, MAXWELL SMITH

We develop a multiperiod rational expectations model of securities market equilibrium in which equilibrium prices may move between periods even though it is common knowledge that no new information has arrived about ultimate security payoffs. This happens because investors know they have imperfect information about the endowments of other investors and this knowledge affects their probability beliefs about the prices that will prevail at the intermediate trading date. These beliefs are reflected in the equilibrium at the initial trading date when investors focus on the probabilities of intermediate capital gains and losses, rather than ultimate payoffs.

UNCERTAINTY, INFORMATION AND INVESTMENT DECISIONS

Published: 3/1971,  Volume: 26,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1971.tb00589.x  |  Cited by: 6

R. G. E. Smith

A Disequilibrium Model of Savings and Loan Associations

Published: 12/1982,  Volume: 37,  Issue: 5  |  DOI: 10.1111/j.1540-6261.1982.tb03618.x  |  Cited by: 1

GARY SMITH, WILLIAM BRAINARD

This paper discusses the consistent specification and estimation of asset demand equations in a disequilibrium model of financial markets. We estimate the effective asset demands of savings and loan associations, allowing for rationing in the mortgage market. These disequilibrium estimates are not very different from the estimates of notional demands with no rationing assumed. Savings and loans seem to be least affected by excess demand situations in that they are apparently not reluctant to raise mortgage rates and/or to ration borrowers.

THE VALUE OF A PRIORI INFORMATION IN ESTIMATING A FINANCIAL MODEL*

Published: 12/1976,  Volume: 31,  Issue: 5  |  DOI: 10.1111/j.1540-6261.1976.tb03215.x  |  Cited by: 9

Gary Smith, William Brainard

Does the Stock Market Overreact to Corporate Earnings Information?

Published: 12/1989,  Volume: 44,  Issue: 5  |  DOI: 10.1111/j.1540-6261.1989.tb02660.x  |  Cited by: 30

PAUL ZAROWIN

This paper tests whether the stock market overreacts to extreme earnings, by examining firms' stock returns over the 36 months subsequent to extreme earnings years. While the poorest earners do outperform the best earners, the poorest earners are also significantly smaller than the best earners. When poor earners are matched with good earners of equal size, there is little evidence of differential performance. This suggests that size, and not investor overreaction to earnings, is responsible for the “overreaction” phenomenon, the tendency for prior period losers to outperform prior period winners in the subsequent period.

Calls of Warrants: Timing and Market Reaction

Published: 6/1993,  Volume: 48,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1993.tb04733.x  |  Cited by: 16

PAUL SCHULTZ

This paper examines the timing of, and reaction to, calls of callable warrants. Three main findings emerge. First, unlike convertible bonds or preferred stock, callable warrants are called almost as soon as possible. Second, there is a negative price reaction of about 3 percent when a call is announced. Finally, at the completion of a call, the stock price rebounds by an average of 7 percent. The total reaction from announcement through completion of the call is a positive excess return of about 4 percent.

Equity Rights Issues and the Efficiency of the UK Stock Market

Published: 9/1979,  Volume: 34,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1979.tb03439.x  |  Cited by: 116

PAUL MARSH

Why Do Firms Use Incentives That Have No Incentive Effects?

Published: 8/2004,  Volume: 59,  Issue: 4  |  DOI: 10.1111/j.1540-6261.2004.00674.x  |  Cited by: 507

Paul Oyer

This paper illustrates why firms might choose to implement stock option plans or other pay instruments that reward “luck.” I consider a model where adjusting compensation contracts is costly and where employees' outside opportunities are correlated with their firms' performance. The model may help to explain the use and recent rise of broad‐based stock option plans, as well as other financial instruments, even when these pay plans have no effect on employees' on‐the‐job behavior. The model suggests that agency theory's often‐overlooked participation constraint may be an important determinant of some common compensation schemes, particularly for employees below the highest executive ranks.

THE CANADIAN DOLLAR, 1948–57*

Published: 3/1960,  Volume: 15,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1960.tb04851.x  |  Cited by: 0

Paul Wonnacott

Corporate Bond Trading Costs: A Peek Behind the Curtain

Published: 4/2001,  Volume: 56,  Issue: 2  |  DOI: 10.1111/0022-1082.00341  |  Cited by: 272

Paul Schultz

In this paper, I use institutional corporate bond trade data to estimate transactions costs in the over‐the‐counter bond market. I find average round‐trip trading costs to be about $0.27 per $100 of par value. Trading costs are lower for larger trades. Small institutions pay more to trade than large institutions, all else being equal. Small bond dealers charge more than large ones. I find no evidence that trading costs more for lower‐rated bonds.

The Choice Between Equity and Debt: An Empirical Study

Published: 3/1982,  Volume: 37,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1982.tb01099.x  |  Cited by: 519

PAUL MARSH

This empirical study of security issues by UK companies between 1959 and 1974 focuses on how companies select between financing instruments at a given point in time. It throws light on a number of interesting questions. First, it demonstrates that companies are heavily influenced by market conditions and the past history of security prices in choosing between debt and equity. Second, it provides evidence that companies appear to make their choice of financing instrument as if they have target levels of debt in mind. Finally, the results are consistent with the notion that these target debt levels are themselves a function of company size, bankruptcy risk, and asset composition.

The Making of an Investment Banker: Stock Market Shocks, Career Choice, and Lifetime Income

Published: 11/11/2008,  Volume: 63,  Issue: 6  |  DOI: 10.1111/j.1540-6261.2008.01409.x  |  Cited by: 223

PAUL OYER

I show that stock market shocks have important and lasting effects on the careers of MBAs. Stock market conditions while MBA students are in school have a large effect on whether they go directly to Wall Street upon graduation. Further, starting on Wall Street immediately upon graduation causes a person to be more likely to work there later and to earn, on average, substantially more money. The empirical results suggest that investment bankers are largely “made” by circumstance rather than “born” to work on Wall Street.

Convertible Bonds Are Not Called Late

Published: 9/1995,  Volume: 50,  Issue: 4  |  DOI: 10.1111/j.1540-6261.1995.tb04058.x  |  Cited by: 59

PAUL ASQUITH

Starting with Ingersoll (1977b), the academic literature has repeatedly sought to explain why convertible bonds are called late. The findings here demonstrate there is no call delay to explain. This paper finds that most convertible bonds, given their call protection, are called as soon as possible. For those that are not, there are significant cash flow advantages to delaying. The median call delay for all convertible bonds is less than four months. If a safety premium is desired to assure the conversion value will exceed the call price at the end of call notice period, the median call period is less than a month.

A SUGGESTION FOR THE REVALUATION OF GOLD*

Published: 3/1963,  Volume: 18,  Issue: 1  |  DOI: 10.1111/j.1540-6261.1963.tb01621.x  |  Cited by: 1

Paul Wonnacott

INTERRELATED MODELS OF HOUSEHOLD BEHAVIOR: A SUMMARY AND AN EXTENSION

Published: 5/1972,  Volume: 27,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1972.tb00977.x  |  Cited by: 0

Paul Wachtel

Discussion

Published: 5/1983,  Volume: 38,  Issue: 2  |  DOI: 10.1111/j.1540-6261.1983.tb02249.x  |  Cited by: 0

PAUL HALPERN

SOME RECENT CHANGES IN THE EURO‐DOLLAR SYST

Published: 9/1964,  Volume: 19,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1964.tb02866.x  |  Cited by: 1

Paul Einzig

Valuation of Underwriting Agreements for UK Rights Issues

Published: 6/1980,  Volume: 35,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1980.tb03493.x  |  Cited by: 16

PAUL MARSH

Pseudo Market Timing and the Long‐Run Underperformance of IPOs

Published: 3/21/2003,  Volume: 58,  Issue: 2  |  DOI: 10.1111/1540-6261.00535  |  Cited by: 324

Paul Schultz

Numerous studies document long‐run underperformance by firms following equity offerings. This paper shows that underperformance is very likely to be observed ex‐post in an efficient market. The premise is that more firms issue equity at higher stock prices even though they cannot predict future returns. Ex‐post, issuers seem to time the market because offerings cluster at market peaks. Simulations based on 1973 through 1997 data reveal that when ex‐ante expected abnormal returns are zero, median ex‐post underperformance for equity issuers will be significantly negative in event‐time. Using calendar‐time returns solves the problem.

THE UPWARD SLOPING IS CURVE AND THE CONTROL OF INCOME AND THE BALANCE OF PAYMENTS

Published: 6/1974,  Volume: 29,  Issue: 3  |  DOI: 10.1111/j.1540-6261.1974.tb01493.x  |  Cited by: 5

Paul Burrows