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on Financial Markets |
| By: | Andrew Atkeson; Jonathan Heathcote; Fabrizio Perri |
| Abstract: | Traditional valuation metrics for the U.S. stock market based on a comparison of the aggregate market value of U.S. corporations to measures of dividends, earnings, output, and the replacement cost of measured capital have been above historical norms for the past 25–30 years. Will they return to their historical means? We use macroeconomic data to argue that the observed decline in labor’s share of corporate output in conjunction with relatively weak corporate investment mechanically generates a persistent rise in the ratio of corporate valuation relative to corporate earnings, even absent any changes in expected returns or growth rates. |
| JEL: | E21 G12 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34748 |
| By: | Dos Santos, Amanda |
| Abstract: | This paper documents the importance of government debt in facilitating the development of corporate bond markets. Using micro-level data from Brazil, I exploit variation in the supply of government bonds at different maturities to estimate the causal effect of additional government debt outstanding on firm issuance decisions. I find that at early stages of development, government debt complements corporate debt, implying that additional government debt outstanding at a given maturity causes firms to issue more. These effects ultimately increase long-term debt issuance and investment across firms, with stronger responses from companies with higher asset duration. However, as markets mature and government debt levels rise, I document a shift from complementarity to substitution. This evidence can be rationalized through government debt reducing corporate pricing uncertainty by providing pricing benchmarks and facilitating price discovery in bond markets. |
| Date: | 2026–02–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:9he6d_v1 |
| By: | Alexander Barzykin |
| Abstract: | Dealers in foreign exchange markets provide bid and ask prices to their clients at which they are happy to buy and sell, respectively. To manage risk, dealers can skew their quotes and hedge in the interbank market. Hedging offers certainty but comes with transaction costs and market impact. Optimal market making with execution has previously been addressed within the Almgren-Chriss market impact model, which includes instantaneous and permanent components. However, there is overwhelming empirical evidence of the transient nature of market impact, with instantaneous and permanent impacts arising as the two limiting cases. In this note, we consider an intermediate scenario and study the interplay between risk management and impact resilience. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.13421 |
| By: | Zahid, Haider; Ali, Amjad; Audi, Marc |
| Abstract: | This study explores how cryptocurrency regulation influences corporate financial reporting across multiple jurisdictions from 2016 to 2022, examining how differing laws alter managerial incentives and assurance processes. Disclosure behaviour in strictly regulated and moderately regulated settings is compared with evidence from 20 firms operating in 10 countries. Ordinary least squares regression and thematic coding provide convergent evidence. OLS regression controls for jurisdictional grouping and sectoral variation are applied. The analysis finds that tougher regimes are associated with greater transparency, more consistent cryptocurrency valuation, and richer risk disclosure. These benefits are most pronounced where proactive regulators exercise strong public financial oversight. Conversely, firms operating under vague or lax regimes exhibit fragmented disclosure and limited comparability. The inquiry also highlights systemic shortcomings, including inconsistent accounting classification of cryptocurrency, the absence of a single impairment rule, and a lack of unified reporting norms. Such deficiencies hinder investors, regulators, and auditors in assessing financial positions and risk exposure. Stakeholder theory highlights accountability pressures, legitimacy theory explains symbolic responses, and systems theory situates disclosure within broader institutional ecosystems, showing how regulatory contexts shape organisational strategy and reporting conventions. The research concludes by urging international harmonisation of accounting standards and sector-specific disclosure guidance to secure transparency and comparability within the expanding digital asset economy. This implies that policymakers should prioritize regulatory clarity to improve global disclosure comparability. |
| Keywords: | Cryptocurrency Regulation, Financial Reporting, Disclosure Quality, FinTech |
| JEL: | G0 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127482 |