Digests

A New Wolf in Town? Pump-and-Dump Manipulation in Cryptocurrency Markets
Anirudh Dhawan, Talis J Putnins
Review of Finance, Volume 27, Issue 3, May 2023, Pages 935–975, https://doi.org/10.1093/rof/rfac051

Cryptocurrency markets witness a unique form of pump-and-dump manipulation. Manipulators use social media platforms such as Telegram to run open chat groups in which they publicly declare that they are pumping a given cryptocurrency (or “coin”) and urge others to join.… Read more...

The Real Effects of Judicial Enforcement
Vincenzo Pezone
Review of Finance, Volume 27, Issue 3, May 2023, Pages 889–933, https://doi.org/10.1093/rof/rfac050

Well-functioning legal institutions are crucial for enforcing contracts and facilitating transactions. For this reason, improving judicial enforcement, and in particular speeding up trial resolution by courts, has been a priority for many judicial systems.… Read more...

Gate Fees: The Pervasive Effect of IPO Restrictions on Chinese Equity Markets
Charles M C Lee, Yuanyu Qu, Tao Shen
Review of Finance, Volume 27, Issue 3, May 2023, Pages 809–849, https://doi.org/10.1093/rof/rfac044

Due to tight IPO regulations, unlisted firms seeking access to public equity markets in China face substantial costs.… Read more...

Do IPO Firms Become Myopic?
Vojislav Maksimovic, Gordon Phillips, Liu Yang
Review of Finance, Volume 27, Issue 3, March 2023, Pages 765–807, https://doi.org/10.1093/rof/rfac054

Do short-term pressures to meet earnings expectations cause myopic investment distortions, whereby public firms under-respond to market opportunities?… Read more...

Tick Size Wars: The Market Quality Effects of Pricing Grid Competition
Sean Foley, Tom G Meling, Bernt Arne Ødegaard
Review of Finance, Volume 27, Issue 2, March 2023, Pages 659–692, https://doi.org/10.1093/rof/rfac032

We examine the market quality effects of explicit tick size competition between trading venues.… Read more...

A Quarter Century of Mortgage Risk
Morris A Davis, William D Larson, Stephen D Oliner, Benjamin R Smith
Review of Finance, Volume 27, Issue 2, March 2023, Pages 581–618, https://doi.org/10.1093/rof/rfac034

This paper provides a comprehensive account of the evolution of default risk for newly originated home mortgages over the past quarter century.… Read more...

Determinants of Short-Term Corporate Yield Spreads: Evidence from the Commercial Paper Market
Jing-Zhi Huang, Bibo Liu, Zhan Shi
Review of Finance, Volume 27, Issue 2, March 2023, Pages 539–579, https://doi.org/10.1093/rof/rfac030

What drives short-term credit spreads is a very important question in credit markets, especially given the role played by short-term corporate debt in the global financial crisis.… Read more...

Long-Horizon Stock Returns Are Positively Skewed
Adam Farago, Erik Hjalmarsson
Review of Finance, Volume 27, Issue 2, March 2023, Pages 495–538, https://doi.org/10.1093/rof/rfac021

Individual investors often have long investment horizons. For certain saving purposes, like retirement savings, the relevant horizon can easily span several decades.… Read more...

Currency Carry Trade by Trucks: The Curious Case of China’s Massive Imports from Itself
Xuepeng Liu, Heiwai Tang, Zhi Wang, Shang-Jin Wei
Review of Finance, Volume 27, Issue 2, March 2023, Pages 469–493, https://doi.org/10.1093/rof/rfac015

Capital controls are common in many developing countries.… Read more...

Bank Stress Testing: Public Interest or Regulatory Capture?
Thomas Schneider, Philip E Strahan, Jun Yang
Review of Finance, Volume 27, Issue 2, March 2023, Pages 423–467, https://doi.org/10.1093/rof/rfac027

Bank stress testing by the U.S. Federal Reserve (the Fed) is the most important innovation in bank capital regulation to have emerged after the 2008 Global Financial Crisis.… Read more...