Information spillover and corporate policies: The case of listed options

Information production associated with derivatives markets is not a sideshow; rather, it has significantly positive spillover effects on an array of corporate decisions of underlying firms. Using a regression-discontinuity design based on exogenous variation in options availability as an instrument...

Full description

Saved in:
Bibliographic Details
Main Authors: BERNILE, Gennaro, HU, Jianfeng, LI, Guangzhong, MICHAELY, Roni
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2023
Subjects:
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/7350
https://ink.library.smu.edu.sg/context/lkcsb_research/article/8349/viewcontent/information_spillover_and_corporate_policies_the_case_of_listed_options_av.pdf
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: Singapore Management University
Language: English
id sg-smu-ink.lkcsb_research-8349
record_format dspace
spelling sg-smu-ink.lkcsb_research-83492023-12-05T02:41:43Z Information spillover and corporate policies: The case of listed options BERNILE, Gennaro HU, Jianfeng LI, Guangzhong MICHAELY, Roni Information production associated with derivatives markets is not a sideshow; rather, it has significantly positive spillover effects on an array of corporate decisions of underlying firms. Using a regression-discontinuity design based on exogenous variation in options availability as an instrument for changes in the information environment, we show that options introductions have causal effects on corporate policies on both sides of the balance sheet. Through improved information efficiency, options availability reduces the need for debt and payout, increases efficient investment, and yields superior innovation. We conduct two independent experiments demonstrating that our instrument s impact is not derived from alternative channels. 2023-01-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/7350 info:doi/10.1017/S0022109023001229 https://ink.library.smu.edu.sg/context/lkcsb_research/article/8349/viewcontent/information_spillover_and_corporate_policies_the_case_of_listed_options_av.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Corporate Finance Finance and Financial Management
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Corporate Finance
Finance and Financial Management
spellingShingle Corporate Finance
Finance and Financial Management
BERNILE, Gennaro
HU, Jianfeng
LI, Guangzhong
MICHAELY, Roni
Information spillover and corporate policies: The case of listed options
description Information production associated with derivatives markets is not a sideshow; rather, it has significantly positive spillover effects on an array of corporate decisions of underlying firms. Using a regression-discontinuity design based on exogenous variation in options availability as an instrument for changes in the information environment, we show that options introductions have causal effects on corporate policies on both sides of the balance sheet. Through improved information efficiency, options availability reduces the need for debt and payout, increases efficient investment, and yields superior innovation. We conduct two independent experiments demonstrating that our instrument s impact is not derived from alternative channels.
format text
author BERNILE, Gennaro
HU, Jianfeng
LI, Guangzhong
MICHAELY, Roni
author_facet BERNILE, Gennaro
HU, Jianfeng
LI, Guangzhong
MICHAELY, Roni
author_sort BERNILE, Gennaro
title Information spillover and corporate policies: The case of listed options
title_short Information spillover and corporate policies: The case of listed options
title_full Information spillover and corporate policies: The case of listed options
title_fullStr Information spillover and corporate policies: The case of listed options
title_full_unstemmed Information spillover and corporate policies: The case of listed options
title_sort information spillover and corporate policies: the case of listed options
publisher Institutional Knowledge at Singapore Management University
publishDate 2023
url https://ink.library.smu.edu.sg/lkcsb_research/7350
https://ink.library.smu.edu.sg/context/lkcsb_research/article/8349/viewcontent/information_spillover_and_corporate_policies_the_case_of_listed_options_av.pdf
_version_ 1784855625181691904