Hamid Boustanifar

This paper examines how managers' charismatic communication shapes investor reactions to earnings calls. We develop a scalable, theory-based measure of charisma from earnings-call transcripts, capturing rhetorical tactics separately in prepared remarks and Q&A. Charisma's effects are context-dependent. In prepared remarks, charisma predicts more positive market reactions, consistent with greater persuasiveness and a clearer articulation of management's vision. In Q&A, where investors expect precise answers, charisma predicts negative market reactions, especially when performance is weak and language is complex. Overall, charismatic communication affects valuation depending on whether it complements or substitutes for credible information.

Organizational research identifies psychological safety—the shared belief that employees can speak up with ideas, questions, or mistakes without fear of negative consequences—as a critical driver of learning, innovation, and team performance. Despite its prominence in organizational science, its implications for firm value and asset prices remain largely unexplored. We construct a novel firm-level measure of psychological safety (PS) from Glassdoor employee reviews using a fine-tuned GPT model. Our measure captures nuanced aspects of workplace voice and interpersonal risk that are not reflected in existing corporate culture metrics. We show that PS predicts future innovation but is not associated with higher contemporaneous market valuations. In contrast, an equal-weighted long–short portfolio that buys firms with high PS and shorts firms with low PS earns an annualized Fama–French six-factor alpha of 5.18%. These returns are robust to alternative weighting schemes, other factor models, and controls for intangible-related factors. Firms with higher PS also experience systematically positive earnings surprises and stronger announcement returns, consistent with the gradual incorporation of its value into prices.

The standard practice in the literature is to exclude firms with negative book equity—termed red equity firms—as outliers. This paper presents the first comprehensive study of red equity firms. Their share has increased from virtually 0% in the early 1960s to over 11% in 2024, with a particularly sharp increase—nearly doubling—in the past decade. These firms tend to be older, have become larger over time, and are disproportionately concentrated in the High Tech and Healthcare sectors. Their total market capitalization is comparable to that of the bottom 78% of publicly traded firms. The majority of red equity cases arise from the exclusion of off-balance-sheet intangible assets, write-downs, and share repurchases. Adjusting for these factors reduces the average number of red equity firms by up to 82%. Using two illustrative applications in corporate finance and asset pricing, we show that the determinants of leverage differ across red equity and non-red equity firms and that the construction of the intangible-adjusted value factor is sensitive to the treatment of red equity firms.

Using Norwegian administrative data, we examine how idiosyncratic personal experiences during an aggregate market shock shape long-run investment behavior. We find that investors who suffered large losses during the 2008 financial crisis persistently reduced their equity allocations and became more likely to exit the stock market entirely. Among those who remained invested, crisis experiences led to significantly more concentrated portfolios—an unintended consequence that increased idiosyncratic risk despite investors' apparent desire to reduce risk exposure. These effects persist for at least five years after the crisis, even as aggregate market conditions recovered and model-based expected returns remained high. We also show that personal crisis experiences affect equity allocation decisions even after controlling for formative year experiences. Moreover, positive formative-year stock market returns partially offset crisis-driven reduction in stock allocation, demonstrating how both direct experience of personal losses and indirect experience of early-life equity market conditions jointly drive persistent investor heterogeneity.

We propose a novel continuous measure of corporate "sinfulness" using textual analysis. This measure captures both the cross-sectional and time-series variation in firms' exposure to sin activities. Our textual approach reveals numerous false positives and false negatives under the conventional industry-classification-code-based method. We further validate our identification strategy using a state-of-the-art large language model. While equal- and value-weighted sin portfolios do not earn abnormal returns, a sinfulness-weighted portfolio yields an annualized alpha of 5%. We find no evidence of mispricing in sin stocks; instead, they exhibit significantly lower crash risk but higher litigation risk.

How do CEOs allocate risk across the personal and corporate domains in which they operate? We propose a perspective in which CEOs manage total risk exposure across domains, with personal financial portfolios and corporate policies jointly contributing to that exposure. This highlights a tension between cross-domain alignment and intertemporal rebalancing, yielding two predictions. First, across CEOs, higher personal financial risk exposure is associated with riskier corporate financial policies. Second, within a given CEO over time, changes in personal portfolio risk induce compensatory adjustments in firm-level risk-taking. We test these using detailed longitudinal data on CEOs' personal financial portfolios and firm-level financial policies in Norway. Consistent with our framework, CEOs with higher personal risk exposure pursue higher leverage and lower cash holdings, and within CEO–firm matches, increases in personal portfolio risk are associated with reductions in firm-level risk-taking. These relationships are stronger when CEOs have greater power relative to the board.

We examine how management disclosure affects media coverage by analyzing firms' responses in earnings call Q&A sessions. Using a machine-learning-based "non-answer" score, we find that evasive managerial responses reduce subsequent media attention, particularly from professional outlets generating original content. This supports a supply-driven view of media coverage: poor disclosure limits journalistic content creation. Reduced coverage, in turn, is associated with lower investor engagement and weaker stock performance. Our findings highlight the critical role of a firm's information environment in shaping the level and nature of subsequent media coverage.

When liabilities are deemed improbable or cannot be reliably estimated by management, they are not recorded on the balance sheet. Instead, they are disclosed qualitatively in the company's filings — obligations related to pending lawsuits, product liability, environmental matters, false advertising, or patent and copyright infringements. We refer to these as intangible liabilities (IL) and construct a firm-level, text-based measure of them. IL is positively related to firm size, volatility, and share turnover, and negatively correlated with accounting performance, abnormal returns, and Tobin's Q. IL predicts future lawsuits against firms and the future deterioration of their reputations. Companies with higher IL trade at lower valuation ratios and have significantly higher future crash risks. A portfolio that is long high IL and short low IL yields an annual abnormal return of 3% after accounting for common factors.

We highlight the limitations of using cumulative advertising expenses as an input measure of brand value. Using two output measures—Interbrand's data and a novel text-based measure—we find that an equal-weighted portfolio of top brands yields an annual abnormal return of 3%. The excess returns are driven by companies that develop their brands internally. Intangible factors proposed in the literature have no explanatory power for the premium. Analysts underestimate the future earnings of top brands, leading to significant excess returns following earnings announcements. We find no abnormal returns associated with the input measure of brand value.

This study examines the role of chief executive officers' (CEOs) wealth in explaining the cross-border acquisition (CBA) activity of small and medium-sized enterprises (SMEs). Within a micro-foundations framework, we integrate insights from the resource-based view and the upper echelons theory and argue that CEO wealth plays a dual role in the CBA activity of SMEs by alleviating financial constraints and increasing willingness to take risks. Using Norwegian census data for the period 2000–2013, we find consistent evidence that CEO wealth has a positive effect on the number, the geographic scope, and the likelihood of engaging in CBAs in high political risk countries.

Exploiting the staggered passage of labour protection laws in the United States, we find that higher labour adjustment costs increased the likelihood of observing zero leverage firms by 22%. This effect is significantly larger in states with stronger unionization, and in industries with higher volatility, concentration, and labour intensity. Both within-firm changes in debt policies and the propensity of newer firms to be debt-free are important in explaining these patterns. Overall, our work contributes to the literature on the relation between financial and labour markets by highlighting the role of labour laws in explaining the zero-leverage puzzle.

Economic theory predicts that (in the absence of mispricing) the excess return to socially responsible businesses is negative in equilibrium. In contrast, using state-of-the-art empirical models and a sample spanning four decades (1984–2020), an equal-weighted portfolio of companies that treat their employees best earns an excess return of 2% to 2.7% per year. The estimated alphas are positive in most periods within the sample (with no upward or downward trend) and are particularly large during crisis periods. Overall, the results suggest that the stock market (still) undervalues employee satisfaction.

This paper shows that in the United States the pro-creditor personal bankruptcy reform of 2005 led to a significant increase in access to, and volume of, credit for households. The paper documents the heterogeneous effects of increased credit access depending on household characteristics. While credit-constrained households were better off following the reform, households with low education and those with self-control problems appear to be negatively affected as a result of over-borrowing. The latter group experienced a significantly larger deterioration in financial health in the following years. Overall, the results highlight the real cost of credit availability for a subgroup of vulnerable households and has implications for the design of personal bankruptcy laws.

This study addresses the growing calls among international business and international entrepreneurship scholars for greater research attention to the effect of leaders' characteristics on their firms' risky internationalization choices. Focusing on the fundamental leader characteristic identified in the international entrepreneurship literature, i.e., risk propensity, we develop and test an original framework for analysis, which suggests that CEOs with greater risk propensity will tend to steer their firms towards greater degrees of internationalization and towards more risky venues/locations (countries at a greater cultural distance) and vehicles/entry modes (acquisitions versus alliances). We also more precisely assess our underlying assumption of agentic CEOs affecting firms' internationalization decisions by positing and testing additional moderator relationships, in which we suggest that the effect of CEO risk propensity on the riskiness of firms' internationalization choices will be (1) amplified when CEOs enjoy greater power, and (2) attenuated for firms with greater internationalization experience. Empirically, our analyses show significant and robust support for both our main effect and moderator hypotheses. Our study has implications for the burgeoning literature on the micro-foundations of internationalization, as well as the upper echelons and international entrepreneurship literatures.

The first Greek bailout on April 11, 2010 triggered a significant reevaluation of sovereign credit risk across Europe. We exploit this event to examine the transmission of sovereign to corporate credit risk. A 10% increase in sovereign credit risk raises corporate credit risk on average by 1.1% after the bailout. The evidence is suggestive of spillovers from sovereign to corporate risk through a financial and a fiscal channel, as the effects are more pronounced for firms that are bank or government dependent. We find no support for indirect spillovers through the risk deterioration of macroeconomic fundamentals.

We study the allocation and compensation of human capital in the finance industry across developed economies from 1970 to 2011. Finance-sector relative wages generally increase, though not uniformly across countries. Trading-related activities account for 50% of the wage increase despite representing only 13% of finance employment on average. Financial deregulation is the most important factor driving up finance wages, with particularly pronounced effects in environments where informational rents and socially inefficient risk-taking are likely prevalent. Differential investment in information and communication technology has no causal explanatory power. High wages in finance attract skilled international immigration to the sector, raising concerns about a potential "brain drain."

Internationalization studies have pointed to the importance of risk and managerial risk attitudes for understanding firm internationalization choices. Previous research has built on the assumption of risk averse managers or has conceptualized risk taking as highly situational e.g. depending on managerial international experience. In this study, we employ a measure of managerial risk-taking propensity based on managers' private investment decisions that is reflective of managerial intrinsic risk preferences. Using a sample of 3392 M&A undertaken by 983 Norwegian firms in the period 2000-2013, we provide empirical evidence that managerial risk taking propensity is positively associated with international intensity, diversification and national distance in the cross-section of firms. These relations are weaker in the case of larger board size and higher share of independent board members.

Economic theory offers competing hypotheses about how the cost and availability of finance influence labor market outcomes. Making use of the U.S. banking reforms between the 1970s and the 1990s as a quasi-natural experiment, this paper studies the impact of credit market development on employment. This paper documents the significant effects of these reforms on employment growth. Potential channels between finance and employment are also investigated. Changes in the growth of the number of self-employed individuals, the entry and exit of firms, and investment growth do not explain most of the employment growth following the reforms. The reforms had a substantially higher impact in industries with higher labor intensity, which is consistent with the idea that labor has fixed costs that need to be financed.

Alex Edmans' "Grow the Pie: How Great Companies Deliver Both Purpose and Profit" provides an alternative approach to business called Pieconomics. Profits to shareholders play a critical role in Pieconomics (similar as in shareholder capitalism), but the goal of an enterprise is to maximize the social value it creates (somewhat similar as in stakeholder capitalism). This review discusses and critically evaluates this thesis.

This paper presents a theoretical framework to understand the impact of foreign bank entry on the access to and the price of credit for different types of firms. A major point of departure from the previous literature is that incumbents' information about firms is endogenous in the model; previous screenings and lending relations of incumbents determine which type(s) of firms they can identify. I show that incumbents' information is negatively correlated with the quality of borrowers. Moreover, although a priori entrants have a comparative advantage in lending to transparent firms, previous lending relations of incumbents might reverse this relation. In particular, given that transparent firms are the only type screened before the entry and therefore they are the only type distinguishable by incumbents, entrants might have a comparative advantage in lending to opaque firms. The analysis provides new insights into the inconclusive evidence of the literature regarding entrants' credit allocation.

Rising wages in the finance industry have been a source of debate and are usually linked to financial deregulations. Exploiting the cross-state and over-time variation in the timing of US bank deregulations, this article investigates the causal impact of each type of deregulation on the relative wages in the finance industry. I document that relative wages in finance began to rise in the early 1980s in almost all states, including those that deregulated before 1970 and those that deregulated in the 1990s. Consistently, after controlling for aggregate macro shocks that affected all states, there is no evidence that relative finance wages increased more following any type of deregulation. If anything, I find a negative impact of bank branching deregulation on relative wages in finance. These results together with those found in the study by Philippon and Reshef (2012) call for a better understanding of the dynamics of wages in the finance industry.