{"id":1138,"date":"2018-11-09T15:36:40","date_gmt":"2018-11-09T14:36:40","guid":{"rendered":"https:\/\/www.uni.lu\/fdef-fr\/events\/option-listing-and-corporate-policies\/"},"modified":"2018-11-09T15:36:40","modified_gmt":"2018-11-09T14:36:40","slug":"option-listing-and-corporate-policies","status":"publish","type":"events","link":"https:\/\/www.uni.lu\/fdef-fr\/events\/option-listing-and-corporate-policies\/","title":{"rendered":"Option Listing and Corporate Policies"},"content":{"rendered":"<section class=\"wp-block-unilux-blocks-free-section section\"><div class=\"container xl:max-w-screen-xl\"><p>Abstract<\/p><p>By enhancing price efficiency of the underlying equity, options market activity may reduce adverse selection and agency costs faced by investors, in turn affecting firms\u2019 optimal policies. Supporting this conjecture, we find that firms whose equity is linked to exchange-listed options carry larger cash holdings and lower financial leverage, while paying lower dividends. Meanwhile, those same firms invest more in physical assets as well as R&#038;D, while achieving better innovation outcomes. We draw causal inferences from difference-in-difference tests that exploit option listings of stocks that meet regulatory requirements by a narrow margin vis-\u00e0-vis stocks that fail them by a similarly narrow margin. Overall, the availability of exchange-listed options appears to affect changes in corporate policies that suggest lower adverse selection and agency problems between firms and equity investors.<\/p><\/div><\/section>","protected":false},"excerpt":{"rendered":"<p>AbstractBy enhancing price efficiency of the underlying equity, options market activity may reduce adverse selection and agency costs faced by investors, in turn affecting firms\u2019 optimal policies. Supporting this conjecture, we find that firms whose equity is linked to exchange-listed options carry larger cash holdings and lower financial leverage, while paying lower dividends. Meanwhile, those same firms invest more in physical assets as well as R&amp;D, while achieving better innovation outcomes. We draw causal inferences from difference-in-difference tests that exploit option listings of stocks that meet regulatory requirements by a narrow margin vis-\u00e0-vis stocks that fail them by a similarly narrow margin. Overall, the availability of exchange-listed options appears to affect changes in corporate policies that suggest lower adverse selection and agency problems between firms and equity investors.<\/p>\n","protected":false},"author":0,"featured_media":1139,"parent":0,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":{"featured_image_focal_point":[],"show_featured_caption":false,"ulux_newsletter_groups":"","uluxPostTitle":"","uluxPrePostTitle":"","_trash_the_other_posts":false,"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"event_start_date":"2018-11-15 12:30:00","event_end_date":"2018-11-15 13:45:00","event_speaker_name":"Gennaro Bernile - University of Miami","event_speaker_link":"","event_is_online":false,"event_location":"Faculty of Law, Economics and Finance\r\nJFK Building \r\n29, avenue Kennedy\r\nL-1855 Luxembourg\r\nGround Floor, Nancy-Metz Room \r\n","event_street":"","event_location_link":"","event_zip_code":"","event_city":"","event_country":"LU"},"events-topic":[301],"events-type":[],"organisation":[115],"authorship":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.3 (Yoast SEO v22.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Option Listing and Corporate Policies - FDEF I Uni.lu<\/title>\n<meta name=\"description\" content=\"AbstractBy enhancing price efficiency of the underlying equity, options market activity may reduce adverse selection and agency costs faced by investors, in turn affecting firms\u2019 optimal policies. Supporting this conjecture, we find that firms whose equity is linked to exchange-listed options carry larger cash holdings and lower financial leverage, while paying lower dividends. Meanwhile, those same firms invest more in physical assets as well as R&amp;D, while achieving better innovation outcomes. We draw causal inferences from difference-in-difference tests that exploit option listings of stocks that meet regulatory requirements by a narrow margin vis-\u00e0-vis stocks that fail them by a similarly narrow margin. Overall, the availability of exchange-listed options appears to affect changes in corporate policies that suggest lower adverse selection and agency problems between firms and equity investors.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.uni.lu\/fdef-fr\/events\/option-listing-and-corporate-policies\/\" \/>\n<meta property=\"og:locale\" content=\"fr_FR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Option Listing and Corporate Policies\" \/>\n<meta property=\"og:description\" content=\"AbstractBy enhancing price efficiency of the underlying equity, options market activity may reduce adverse selection and agency costs faced by investors, in turn affecting firms\u2019 optimal policies. Supporting this conjecture, we find that firms whose equity is linked to exchange-listed options carry larger cash holdings and lower financial leverage, while paying lower dividends. Meanwhile, those same firms invest more in physical assets as well as R&amp;D, while achieving better innovation outcomes. We draw causal inferences from difference-in-difference tests that exploit option listings of stocks that meet regulatory requirements by a narrow margin vis-\u00e0-vis stocks that fail them by a similarly narrow margin. 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