Table Of Content

INDEX TO VOLUME LX ARTICLES A Comparison of Centralized and Frag- Corporate Yield Spreads: Default mented Markets with Costly Search Risk or Liquidity? New Evidence Xiangkang Yin from the Credit Default Swap An Empirical Analysis of the Dynamic Relation between Investment-Grade Francis A. Longstaff, Bonds and Credit Default Swaps ... Sanjay Mithal, and Roberto Blanco, Eric Neis Simon Brennan, and Currency Returns, Intrinsic Value, and Ian W. Marsh Institutional-Investor Flows ........ Arbitraging Arbitrageurs.............. Kenneth A. Froot and Mukarram Attari, Tarun Ramadorai Antonio S. Mello, and Debt Dynaamesi: c< « sis. sec cnciconanenes Martin E. Ruckes Christopher A. Hennessy and Are Firms Underleveraged? An Exam- Toni M. Whited ination of the Effect of Leverage on Debt Maturity, Risk, and Asymmetric Default Probabilities................ Information Carlos A. Molina Allen N. Berger, Asset Sales, Investment Opportunities, Marco A. Espinosa-Vega, and the Use of Proceeds............. W. Scott Frame, and Thomas W. Bates Nathan H. Miller Asymmetric Price Movements and Bor- Demand—Deposit Contracts and the rowing Constraints: A Rational Ex- Probability of Bank Runs........... pectations Equilibrium Model of Itay Goldstein and Crises, Contagion, and Confusion... Ady Pauzner Kathy Yuan Distance, Lending Relationships, and Board Seat Accumulation by Execu- Competition tives: A Shareholder’s Perspective .. Hans Degryse and Tod Perry and Steven Ongena Urs Peyer Do Bank Relationships Affect the Can Managers Forecast Aggregate Firm’s Underwriter Choice in the Market Returne?: 6 .ccdc0 cc3taw< u se: Corporate-Bond Underwriting Mar- Alexander W. Butler, Gustavo Grullon, and Ayako Yasuda James P. Weston Do Behavioral Biases Affect Prices?... CEO Compensation, Change, and Cor- Joshua D. Coval and porate SURETY [oo 6c scenes as P Tyler Shumway James Dow anc Do Domestic Investors Have an Infor- Clara C. Raposo mation Advantage? Evidence from CEO Overconfidence and Corporate Indonesia Investment Tomas Dvorak Ulrike Malmendier and Do Firms Rebalance Their Capital Geoffrey Tate Stemcturea?. . 3. io. 2 seas cecnasdonsass Changing Names with Style: Mutual Mark T. Leary and Fund Name Changes and Their Ef- Michael R. Roberts fects on Fund Flows................- Do Insiders Learn from Outsiders? Michael J. Cooper, Evidence from Mergers and Huseyin Gulen, and ACHAREIONS <2. 4252s ee eas ees P. Raghavendra Rau Yuanzhi Luo Consumption, Dividends, and _ the Do Professional Traders Exhibit My- Cross Section of Equity Returns.... opic Loss Aversion? An Experimental Ravi Bansal, Robert F. Dittmar, and Michael S. Haigh and Christian T. Lundblad John A. List 3026 The Journal of Finance Does Idiosyncratic Risk Really Matter? Insider Trading Restrictions and Ana- Turan G. Bali, lysts’ Incentives to Follow Firms.... Nusret Cakici, Robert M. Bushman, Xuemin (Sterling) Yan, and Joseph D. Piotroski, and Zhe Zhang Abbie J. Smith Does Prospect Theory Explain IPO Market Behavior?................... Alexander Ljungqvist and Yaniv Grinstein and William J. Wilhelm, Jr. Roni Michaely Does the Failure of the Expectations Investment Bank Reputation and the Hypothesis Matter for Long-Term Price and Quality of Underwriting POR RIOER Sree ect ita a sare eee EE VIOOE rial tos 555 2as waa ee Antonios Sangvinatsos and Lily Hua Fang Jessica A. Wachter IPO Pricing in “Hot” Market Condi- Entrepreneurial Spawning: Public Cor- tions: Who Leaves Money on the porations and the Genesis of New MECN Ss ccaR ates be ods oda ee aE Ventures, 1986 to 1999 Francois Derrien Paul Gompers, Is Debt Relief Efficient?............... Josh Lerner, and Serkan Arslanalp and David Scharfstein Peter Blair Henry Equilibrium in a Dynamic Limit Order Judging Fund Managers by the Com- Market pany They Keep Ronald L. Goettler, Randolph B. Cohen, Christine A. Parlour, and Joshua D. Coval, and Uday Rajan Luboég Pastor Finance and the Business Cycle: Inter- Lifting the Veil: An Analysis of Pre- national, Inter-Industry Evidence .. trade Transparency at the NYSE... Matias Braun and Ekkehart Boehmer, Borja Larrain Gideon Saar, and Financial Analyst Characteristics and Lei Yu Herding Behavior in Forecasting ... Liquidity Shortages and Banking Michael B. Clement and UIRCN Sock bccccuae eaeueece eanm aneee es Senyo Y. Tse Douglas W. Diamond and Financial and Legal Constraints to Raghuram G. Rajan Local Does as Local Is: Information Thorsten Beck, Content of the Geography of Individ- Asli Demirgiic-Kunt, and ual Investors’ Common Stock Invest- Vojislav Maksimovic MRO es loses os scmeee tclenee recess Financial Market Design and the Zoran Ivkovié and Equity Premium: Electronic versus Scott Weisbenner Floor Trading Managerial Opportunism during Cor- Pankaj K. Jain porate Litigation Financial Networks: Contagion, Bruce Haslem Commitment, and Private Sector Managerial Stock Ownership and the Bailouts Maturity Structure of Corporate Yaron Leitner Governance Mechanisms and Equity Sudip Datta, Prices Mai Iskandar-Datta, and K. J. Martijn Cremers and Kartik Raman Vinay B. Nair Managers, Workers, and Corporate Hedging or Market Timing? Selecting Control the Interest Rate Exposure of Corpo- M. Pagano and rate Debt P. F. Volpin Michael Faulkender Market Timing and Managerial Portfo- Housing Collateral, Consumption In- TiO PICEISIORS 3. 5 occa. cso dees ealene eee surance, and Risk Premia: An Em- Dirk Jenter pirical Perspective .................. Methods of Payment in Asset Sales: Hanno N. Lustig and Contracting with Equity versus Cash Stijn G. Van Nieuwerburgh Myron B. Slovin, Information and Control in Ventures Marie E. Sushka, ana and Alliances John A. Polonchek Wouter Dessein Index to Volume LX Minutes of the Annual Membership Testing Agency Theory with En- Meeting trepreneur Effort and Wealth David H. Pyle Marianne P. Bitler, Monitoring and Controlling Bank Risk: Tobias J. Moskowitz, and Annette Vissing-Joorgensen C_N. V. Krishnan, The Choice of Payment Method in Eu- P. H. Ritchken, and ropean Mergers and Acquisitions... J. B. Thomson Mara Faccio and On the Benefits of Concurrent Lending Ronald W. Masulis and Underwriting The Geography of Equity Analysis.... Steven Drucker and Christopher J. Malloy Manju Puri The Impact of Bank Consolidation on On the Industry Concentration of Commercial Borrower Welfare Actively Managed Equity Mutual Jason Karceski, PA Ss 5c teense rersecntiidacks Steven Ongena, and Marcin Kacperczyk, David C. Smith Clemens Sialm, and The Market Impact of Trends and Lu Zheng Sequences in Performance: New Optimal Capital Structure and Indus- Evidence try Dynamics Gregory R. Durham, Jianjun Miao Michael G. Hertzel, and Optimal Life-Cycle Asset Alloca- J. Spencer Martin tion: Understanding the Empirical The Optimal Concentration of Evidence Creditors Francisco Gomes and Arturo Bris and Alexander Michaelides Ivo Welch Partial Privatization and Firm Perfor- The Role of IPO Underwriting Syndi- mance cates: Pricing, Information Produc- tion, and Underwriter Competition. Predatory Trading Shane A. Corwin and Markus K. Brunnermeier Paul Schultz and Lasse Heje Pedersen The Stock Market’s Reaction to Unem- Presidential Address: The Limits of Fi- ployment News: Why Bad News Is nancial Globalization Usually Good for Stocks............. René M. Stulz John H. Boyd, Private Equity Performance: Re- Jian Hu, and turns, Persistence, and Capital Ravi Jagannathan Uo PP pRied a2 Se gry er A Pea gD FETA The Theory of Bank Risk Taking and Steven N. Kaplan and Competition Revisited Antoinette Schoar John H. Boyd and Rational IPO Waves. 2... 256 oc65 3 sss Gianni De Nicol6 Lubos Pastor and The Value Premium Pietro Veronesi Report of the Editor of The Journal of Thy Neighbor’s Portfolio: Word-of- Finance for the Year 2004 Mouth Effects in the Holdings and Robert F. Stambaugh Trades of Money Managers........ Report of the Executive Secretary and Harrison Hong, Treasurer Jeffrey D. Kubik, and David H. Pyle Jeremy C. Stein Stochastic Convenience Yield Implied Time Variation in the Covariance be- from Commodity Futures and Inter- tween Stock Returns and Consump- CUS TRUER a ca cccascenuncasesess tion Growth Jaime Casassus and Gregory R. Duffee Pierre Collin-Dufresne 2283 To Steal or Not to Steal: Firm At- Strategic Behavior and Underpric- tributes, Legal Environment, and ing in Uniform Price Auctions: Valuation Evidence from Finnish Treasury Art Durnev and Po ee ane rtera Per aeR oy Meee E. Han Kim Matti Keloharju, Trade Generation, Reputation, and Kjell G. Nyborg, and Sell-Side Analysts Kristian Rydqvist Andrew R. Jackson 3028 The Journal of Finance Trading Volume, Information Asymme- Wealth Destruction on a Massive try, and Timing Information Seale? A Study of Acquiring-Firm Joon Chae Returns in the Recent Merger Transparency and International Port- folio Holdings Sara B. Moeller, R. Gaston Gelos and Frederik P. Schlingemann, and Shang-dJin Wei René M. Stulz Trends in Corporate Governance What Determines the Domestic Bias Benjamin E. Hermalin and Foreign Bias? Evidence from Vested Interest and Biased Price Es- Mutual Fund Equity Allocations timates: Evidence from an Auction Worldwide Market Kalok Chan, Jianping Mei and Vicentiu Covrig, and Michael Moses Lilian Ng Wanna Dance? How Firms and Under- What Explains the Stock Market’s writers Choose Each Other? ........ Reaction to Federal Reserve Chitru S. Fernando, Vladimir A. Gatchev, and Ben S. Bernanke and Paul A. Spindt Kenneth N. Kuttner INDEX TO VOLUME LX AUTHORS ARSLANALP, SERKAN “Is Debt Relief Casassus, JAIME “Stochastic Conve- Efficient?” nience Yield Implied from Commod- ATTARI, MUKARRAM ity Futures and Interest Rates” 2283 Arbitrageurs” CuHaz, Joon “Trading Volume, In- Bau, TuRAN G. “Does Idiosyncratic Risk formation Asymmetry, and Timing Really Matter?” Information” 413 Bansa_, Ravi “Consumption, Dividends, Cuan, KaLok “What Determines the Do- and the Cross Section of Equity mestic Bias and Foreign Bias? Evi- Returns” dence from Mutual Fund Equity Al- 3aTES, THomas W. “Asset Sales, Invest- locations Worldwide” ment Opportunities, and the Use of CLEMENT, Micuak1 B. “Financial Analyst Proceeds” Characteristics and Herding Behav- Beck, THORSTEN “Financial and Legal ior ii POFECAStIMND « ...6c. ccccdcews , Constraints to Growth: Does Firm ConHEN, RaANpo.tpH B. “Judging Fund SAE NRE orca tad vaccncdeacduness Managers by the Company They BerGER, ALLEN N. “Debt Maturity, Risk, Keep” and Asymmetric Information” Co.LLiIn-DUFRESNE, PIERRE (See Casas- BERNANKE, BEN S. “What Explains the BU iis cc nxcnns Wace nnchewe Caen seston Stock Market’s Reaction to Federal Cooper, MicHae. J. “Changing Names Reserve Pune 22255 nasic.aiseens with Style: Mutual Fund Name 3ITLER, MARIANNE P. “Testing Agency Changes and Their Effects on Fund Theory with Entrepreneur Effort and Wealth” Corwin, SHANE A. “The Role of IPO Un- BLANco, Roperto “An Empirical Analy- derwriting Syndicates: Pricing, In- sis of the Dynamic Relation between formation Production, and Under- Investment-Grade Bonds and Credit writer Competition” Default Swaps” 2255 Cova., Josuua D. (See Cohen) BoEHMER, EKKEHART “Lifting the Veil: Cova, JosHua D. “Do Behavioral Biases An Analysis of Pre-trade Trans- Affect Prices?” parency at the NYSE” Covric, Vicentiu (See Chan) Boyp, JoHN H. “The Stock Market’s Cremers, K. J. Martin “Governance Reaction to Unemployment News: Mechanisms and Equity Prices” .... Why Bad News Is Usually Good for Darra, Supip “Managerial Stock Own- ership 7nd the Maturity Structure of Boyp, Joun H. “The Theory of Bank Corporate Debt” Risk Taking and Competition Revis- De Nico.6, GIANNI (See Boyd) ited” Dearyse, Hans “Distance, Lending Re- Braun, Matias “Finance and the Busi- lationships, and Competition” ness Cycle: International, Inter- Demirciig-Kunt, Asi (See Beck) Industry Evidence”.................. DERRIEN, Francois “IPO Pricing in “Hot” BRENNAN, SIMON (See Blanco) Market Conditions: Who Leaves Bris, ArTuRO “The Optimal Concentra- Money on the Table?” tion: Of CredHOre « . <2 .ccsc cess usees DessEIN, Wouter “Information and Con- BRUNNERMEIER, Markus K. “Predatory trol in Ventures and Alliances” Trading” Diamonp, Douc.as W. “Liquidity Short- BusHMAN, Rosert M. “Insider Trading ages and Banking Crises” Restrictions and Analysts’ Incentives Dirrmar, Ropert F. (See Bansal) to Follow Firms” Dow, James “CEO Compensation, BuTLeR, ALEXANDER W. “Can Man- Change, and Corporate Strategy”... agers Forecast Aggregate Market Drucker, STEVEN “On the Bene- Returns?” fits of Concurrent Lending and Caxicl, Nusret (See Bali) Underwriting” 3030 The Journal of Finance Durrer, Grecory R. “Time Variation in Honc, Harrison “Thy Neighbor’s Port- the Covariance between Stock Re- folio: Word-of-Mouth Effects in the turns and Consumption Growth”... Holdings and Trades of Money Duruam, Grecory R. “The Market Im- Managers” 2801 pact of Trends and Sequences in Per- Hu, Jian (See Boyd) 649 formance: New Evidence” IsKANDAR-Datta, Mat (See Datta) 2333 Durnev, Art “To Steal or Not to Steal: IvKovic, ZoRAN “Local Does as Loca! Is: Firm Attributes, Legal Environment, Information Content of the Geogra- and Valuation” phy of Individual Investors’ Common DvorAk, ToMAS “Do Domestic Investors Stock Investments” Have an Information Advantage? Ev- JACKSON, ANDREW R. “Trade Generation, idence from Indonesia” Reputation, and Sell-Side Analysts” Espinosa-VEGA, Marco A. (See Berger) JAGANNATHAN, Ravi (See Boyd) Faccio, Mara “The Choice of Payment JAIN, PanKAJ K. “Financial Market De- Method in European Mergers and sign and the Equity Premium: Elec- Acquisitions” ee tronic versus Floor Trading” Fano, Lity Hua “Investment Bank Rep- JENTER, Dirk “Market Timing and Man- utation and the Price and Quality of agerial Portfolio Decisions” Underwriting Services” Kacperczyk, Marcin “On the Industry FAULKENDER, MICHAEL “Hedging or Mar- Concentration of Actively Managed ket Timing? Selecting the Interest Equity Mutual Funds” Rate Exposure of Corporate Debt” .. KapLaN, STEVEN N. “Private Equity Per- FERNANDO, CuHiTRU S. “Wanna Dance? formance: Returns, Persistence, and How Firms and_ Underwriters Capital Flows” Choose Each Other?” Karceski, JASON “The Impact of Bank Frame, W. Scott (See Berger) Consolidation on Commercial Bor- Froot, KENNETH A. “Currency Returns, rower Welfare” ... Intrinsic Value, and Institutional- KeLonarsu, Marri “Strategic Behavior Investor Flows” and Underpricing in Uniform Price GarTcHEV, VLAnimir A. (See Fernando). . Auctions: Evidence from Finnish GELos, R. Gaston “Transparency and Treasury Auctions” International Portfolio Holdings” ... Kim, E. Han (See Durnev) GOETTLER, RONALD L. “Equilibrium in a KRISHNAN, C. N. V. “Monitoring and Con- Dynamic Limit Order Market” trolling Bank Risk: Does Risky Debt Go LpsTEIN, ITtay “Demand—Deposit Con- Help?” tracts and the Probability of Bank Kurik, JEFFREY D. (See Hong) Runs” KuTTNeR, KENNETH N. (See Bernanke) . Gomes, Francisco “Optimal Life-Cycle LARRAIN, Borsa (See Braun) Asset Allocation: Understanding the Leary, Mark T. “Do Firms Rebalance Empirical Evidence” Their Capital Structures?” GoMPERS, PauL “Entrepreneurial LeITNER, YARON “Financial Networks: Spawning: Public Corporations and Contagion, Commitment, and Pri- the Genesis of New Ventures, 1986 vate Sector Bailouts” 577 LERNER, JOSH (See Gompers) GRINSTEIN, YANIV “Institutional Hold- List, Jon A. (See Haigh) ings and Payout Policy” 1389 LJUNGQVIST, ALEXANDER “Does Prospect GRULLON, Gustavo (See Butler) 963 Theory Explain IPO Market GULEN, Huseyin (See Cooper) 2825 Behavior?” Gupta, Nanpini “Partial Privatization LonestaFF, Francis A. “Corporate Yield and Firm Performance” 987 Spreads: Default Risk or Liquidity? HaicH, Micuaet S. “Do Professional New Evidence from the Credit De- Traders Exhibit Myopic Loss Aver- fault Swap Market” sion? An Experimental Analysis” ... 523 LuNDBLAD, CHRISTIAN T. (See Bansal)... HastemM, Bruce “Managerial Oppor- Luo, YUANzHI “Do Insiders Learn from tunism during Corporate Litigation” 2013 Outsiders? Evidence from Mergers HENNESSY, CHRISTOPHER A. “Debt and Acquisitions” Dynamics” 1129 Lustic, Hanno N. “Housing Col- Henry, PETER Buair (See Arslanalp) ... 1017 lateral, Consumption Insurance, HERMALIN, BENJAMIN E. “Trends in Cor- and Risk Premia: An Empirical porate Governance” Perspective” HertTzeEL, Micuae G. (See Durham)... Maksimovic, VoJIsLav (See Beck) Index to Volume LX 3031 MALLoy, CHRISTOPHER J. “The Geography Ruckes, Martin E. (See Attari) 2471 of Equity Analysis”.................. 719 Rypavist, Kristian (See Keloharju) .... 1865 MALMENDIER, ULRIKE “CEO Overconfi- Saar, GIDEON (See Boehmer) 783 dence and Corporate Investment”... 2661 SanGviNAtTsos, ANTONIOS “Does the Fail- Marsh, IAN W. (See Blanco) 2255 ure of the Expectations Hypothesis Martin, J. SPENCER (See Durham) 2551 Matter for Long-Term Investors?” .. 179 Masu is, Ronatp W. (See Faccio) 1345 ScuarrstTEIn, Davin (See Gompers) 577 MEI, JIANPING “Vested Interest and Bi- SCHLINGEMANN, FREDERIK P. ased Price Estimates: Evidence from Moeller) 757 an Auction Market” 2409 Scuoar, ANTOINETTE (See Kaplan) 1791 ME Lo, Antonio S. (See Attari) 2471 Scuuttz, Paut (See Corwin) 443 Miao, JIANJUN “Optimal Capital Struc- SuHumway, TYLER (See Coval) 1 ture and Industry Dynamics” 2621 SIALM, CLEMENS (See Kacperezyk) 1983 MicHAgLIpEs, ALEXANDER (See Gomes). . 869 Stovin, Myron B. “Methods of Payment MicHakLy , Roni (See Grinstein) 1389 in Asset Sales: Contracting with Eq- Mier, NATHAN H. (See Berger) 2895 uity versus Cash” 2385 MITHAL, SANJAY (See Longstaff) 2213 Situ, Apsir J. (See Bushman) 35 MoeELLer, Sara B. “Wealth Destruction Situ, Davin C. (See Karceski) 2043 on a Massive Scale? A Study of Sprnpt, Paut A. (See Fernando) 2437 Acquiring-Firm Returns in the Re- SrampauGu, Roper F. “Report of the Ed- cent Merger Wave” itor of The Journal of Finance for the Mo ina, Carios A. “Are Firms Under- Year 2004” 2125 leveraged? An Examination of the Ef- 2801 fect of Leverage on Default Probabil- 757 ities” 1427 Stutz, Reneé M. “The Limits of Financial 2409 Globalization” 1595 Moskowitz, Tosias J. (See Bitler) 539 Susuka, Marte E. (See Slovin) 2385 Nair, Vinay B. (See Cremers) 2859 Tate, GEOFFREY (See Malmendier) 2661 NeIs, Eric (See Longstaff) 2213 TuHomson, J. B. (See Krishnan) 343 Ne, Liian (See Chan) 1495 Tse, Senyo Y. (See Clement) 307 Nysorc, KjELL G. (See Keloharju) 1865 Van NIEUWERBURGH, STUN G. (See ONGENA, STEVEN (See Degryse) 231 Lustig) 1167 ONGENA, STEVEN (See Karceski) 2043 VERONESI, PieTRO (See Pastor) 1713 PaGcAno, M. “Managers, Workers, and VISSING-J @RGENSEN, ANNETTE (See Bitler) 539 Corporate Control” 841 Votpin, P. F. (See Pagano) 841 PARLOUR, CHRISTINE A. (See Goettler) .. 2149 Wacuter, Jessica A. (See Sangvinatsos) 179 PAstor, Lupo’ (See Cohen) 1057 WEI, SHANG-JIN (See Gelos) 2987 PAstor, Lugo’ “Rational IPO Waves”. . 1713 WEISBENNER, Scort (See Ivkovié) 267 PauzNner, Apy (See Goldstein) 1293 WE cu, Ivo (See Bris) 2193 PrepERSEN, LassE HeJe (See Brunner- WEsTON, JAMES P. (See Butler) 963 meier) 1825 Whiten, Toni M. (See Hennessy) 1129 Perry, Top “Board Seat Accumulation WILHELM, WiLuiam J., JR. (See by Executives: A Shareholder’s Per- Ljunggqvist) 1759 spective” 2083 YAN, XUEMIN (STERLING) (See Bali) 905 Pryer, Urs (See Perry) 2083 Yasupa, Ayako “Do Bank Relationships PioTROSKI, JOSEPH D. (See Bushman) .. 35 Affect the Firm’s Underwriter Choice POLONCHEK, JOHN A. (See Slovin) 2385 in the Corporate-Bond Underwriting Puri, Manju (See Drucker) 2763 Market?” Py.e, Davin H. “Minutes of the Annual Yin, XIANGKANG “A Comparison of Cen- Membership Meeting” 2141 tralized and Fragmented Markets Py.e, Davin H. “Report of the Executive with Costly Search” Secretary and Treasurer” 2143 Yu, Lei (See Boehmer) RAJAN, RAGHURAM G. (See Diamond)... 615 Yuan, Katuy “Asymmetric Price Move- RaJAn, Upay (See Goettler) 2149 ments and Borrowing Constraints: Ramaporal, TARUN (See Froot) 1535 A Rational Expectations Equilibrium Raman, Kartik (See Datta) 2333 Model of Crises, Contagion, and Con- Raposo, Ciara C. (See Dow) 2701 fusion” Rau, P. RAGHAVENDRA (See Cooper) 2825 ZHANG, Lu “The Value Premium” RitcHkKeEn, P. H. (See Krishnan) 343 ZHANG, ZHE (See Bali) Roserts, MicHakt R. (See Leary) 2575 ZHENG, Lu (See Kacperczyk)