Baixiao Liu

Why Did Auction Rate Bond Auctions Fail During 2007-2008?

The auction rate bond market grew from inauspicious beginnings in 1985 to representing a significant fraction of the municipal bond market in 2007, with a total of 603 issuances raising more than

Economic Consequences of Social Media Adoption by CEOs and CFOs

35 billion in capital. Since March of 2008 not a single auction rate bond has been issued. The last issuance coincided with a wave of “failures” of auction rate bond auctions during the early winter of 2008. Pundits have attributed the auction failures to a “frozen” market and hint that irrationality on the part of investors precipitated the auction failures. Missing from the headlines is that all auction rate bonds have interest rate caps that limit their yields. The authors find that, contrary to the impression given by news headlines, not all auctions failed and that investors rationally discriminated among bonds such that it was primarily those with low caps that experienced high failure rates. They further conclude that, in the absence of such caps, few if any auctions would have failed.

The Emergence of

Corporate executives are becoming increasingly active on social media channels. This paper examines the economic consequences of such behavior for the underlying firms by looking at the personal Twitter activity of S&P 1500 CEOs/CFOs. Personal tweets contain news as well as reports on executives’ day-to-day activities, current interests, and mood. We provide evidence that, on the upside, personal tweets increase investor awareness and improve stock market liquidity. On the downside, tweets sometimes incite naive stock market reactions, thereby destabilizing prices. The SEC’s “embracement of social media” in April 2013 appears to have increased the “upside-effects”, while decreasing the “downside-effect”.Executives are becoming increasingly active on social media channels. This paper examines the economic consequences of such behavior for the underlying firms by looking at the personal Twitter activity of S&P 1500 CEOs/CFOs. Personal tweets contain news as well as reports on the executive’s day-to-day activities, current interests, and mood. We provide evidence that, on the upside, personal tweets can increase investor awareness and improve stock market liquidity. On the downside, tweets can sometimes incite naive stock market reactions, thereby destabilizing prices. The SEC’s “embracement of social media” in April 2013 appears to have increased the “upside-effects”, while decreasing the “downside-effect”.

The Economic Consequences of Having 'Social Media Savvy' Executives

Corporate executives are becoming increasingly active on social media channels. This paper examines the economic consequences of such behavior for the underlying firms by looking at the personal Twitter activity of S&P 1500 CEOs/CFOs. Personal tweets contain news as well as reports on executives’ day-to-day activities, current interests, and mood. We provide evidence that, on the upside, personal tweets increase investor awareness and improve stock market liquidity. On the downside, tweets sometimes incite naive stock market reactions, thereby destabilizing prices. The SEC’s “embracement of social media” in April 2013 appears to have increased the “upside-effects”, while decreasing the “downside-effect”.Executives are becoming increasingly active on social media channels. This paper examines the economic consequences of such behavior for the underlying firms by looking at the personal Twitter activity of S&P 1500 CEOs/CFOs. Personal tweets contain news as well as reports on the executive’s day-to-day activities, current interests, and mood. We provide evidence that, on the upside, personal tweets can increase investor awareness and improve stock market liquidity. On the downside, tweets can sometimes incite naive stock market reactions, thereby destabilizing prices. The SEC’s “embracement of social media” in April 2013 appears to have increased the “upside-effects”, while decreasing the “downside-effect”.

When Top Executives Start Having a Personal Twitter Account, What Happens to Their Firms?

Corporate executives are becoming increasingly active on social media channels. This paper examines the economic consequences of such behavior for the underlying firms by looking at the personal Twitter activity of S&P 1500 CEOs/CFOs. Personal tweets contain news as well as reports on executives’ day-to-day activities, current interests, and mood. We provide evidence that, on the upside, personal tweets increase investor awareness and improve stock market liquidity. On the downside, tweets sometimes incite naive stock market reactions, thereby destabilizing prices. The SEC’s “embracement of social media” in April 2013 appears to have increased the “upside-effects”, while decreasing the “downside-effect”.Executives are becoming increasingly active on social media channels. This paper examines the economic consequences of such behavior for the underlying firms by looking at the personal Twitter activity of S&P 1500 CEOs/CFOs. Personal tweets contain news as well as reports on the executive’s day-to-day activities, current interests, and mood. We provide evidence that, on the upside, personal tweets can increase investor awareness and improve stock market liquidity. On the downside, tweets can sometimes incite naive stock market reactions, thereby destabilizing prices. The SEC’s “embracement of social media” in April 2013 appears to have increased the “upside-effects”, while decreasing the “downside-effect”.

'Consistent' Earnings Surprises

Corporate executives are becoming increasingly active on social media channels. This paper examines the economic consequences of such behavior for the underlying firms by looking at the personal Twitter activity of S&P 1500 CEOs/CFOs. Personal tweets contain news as well as reports on executives’ day-to-day activities, current interests, and mood. We provide evidence that, on the upside, personal tweets increase investor awareness and improve stock market liquidity. On the downside, tweets sometimes incite naive stock market reactions, thereby destabilizing prices. The SEC’s “embracement of social media” in April 2013 appears to have increased the “upside-effects”, while decreasing the “downside-effect”.Executives are becoming increasingly active on social media channels. This paper examines the economic consequences of such behavior for the underlying firms by looking at the personal Twitter activity of S&P 1500 CEOs/CFOs. Personal tweets contain news as well as reports on the executive’s day-to-day activities, current interests, and mood. We provide evidence that, on the upside, personal tweets can increase investor awareness and improve stock market liquidity. On the downside, tweets can sometimes incite naive stock market reactions, thereby destabilizing prices. The SEC’s “embracement of social media” in April 2013 appears to have increased the “upside-effects”, while decreasing the “downside-effect”.

The Role of the Media in Corporate Governance: Do the Media Influence Managers’ Capital Allocation Decisions?

This paper tests the hypothesis that analysts report biased earnings estimates in order to enhance their stock recommendation performance. In particular, we argue that analysts with optimistic (pessimistic) stock recommendations tend to issue negatively (positively) biased earnings forecasts so that the underlying firms are more likely to beat (miss) the consensus forecasts and thus have higher (lower) stock returns after these recommendations are issued. Consistent with this hypothesis, we find that average stock recommendations prior to earnings announcements significantly and positively predict subsequent earnings surprises. In addition, the predictability is substantially stronger when the net benefits associated with such strategic behavior are larger, for example, among firms with lower analyst coverage.