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on Financial Markets |
| By: | Terada, Shinichiro |
| Abstract: | This paper investigates whether the activities of OpenAI—particularly those related to its generative AI product, ChatGPT—have affected major U.S. technology firms, Big Tech, collectively referred to as GAFAM (Alphabet/Google, Apple, Meta/Facebook, Amazon, and Microsoft). Using a short-term event study methodology, we analyze the abnormal stock returns of these firms in response to key OpenAI-related events, including product launches, corporate investments, and technological integrations. Our empirical analysis reveals three main findings. First, the release of ChatGPT had no statistically significant effect on the stock returns of each of GAFAM firms. Second, Microsoft's direct investments in OpenAI, including a $1 billion and a multi-billion-dollar deal, resulted in neutral market responses, suggesting a balance between cost and expected strategic benefit. Third, collaborations that integrated OpenAI's technology into Microsoft's Bing and Edge, and Apple's iOS ecosystem yielded statistically significant positive abnormal returns for the respective firms. These results imply that OpenAI's competitive impact on GAFAM is not direct rivalry but rather complementary enhancement. OpenAI's AI capabilities function as a core competence that strengthens the existing revenue-generating platforms of Big Tech. This suggests a business ecosystem in which AI technologies are not isolated strategic assets, but rather enablers of broader corporate competitiveness. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itse25:331311 |
| By: | Clemens Sialm; David X. Xu |
| Abstract: | Mutual funds create liquidity for investors by issuing demandable equity shares while holding illiquid securities. We study the implications of this liquidity creation by examining frequent trading suspensions in China, which temporarily eliminate market liquidity in affected stocks. These suspensions cause significant mispricing of mutual funds due to inaccurate valuations of their illiquid holdings. We find that investors actively acquire information about suspended stocks held by mutual funds, driving flows into underpriced funds. This information is subsequently incorporated into stock prices when trading resumes. Our findings suggest that mutual fund liquidity creation stimulates information acquisition about illiquid, information-sensitive assets. |
| JEL: | G11 G12 G14 G15 G23 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34520 |
| By: | C. Howe, Lauren; Giurge, Laura M.; F. Wagner, Alexander; I. Menges, Jochen |
| Abstract: | Conference participants (i.e., financial analysts and investors) about their companies’ prospects. Much research has focused on how CEOs speak about business-related topics in these calls, yet surprisingly the literature has not considered how statements that go beyond financial information affect market participants. When we explored archival data of how CEOs of publicly traded U.S.-based companies from the Russell 3000 Index spoke about COVID-19 in conference calls as the pandemic began in 2020, we noticed that about half of CEOs made “human care statements” that expressed a concern for people, with seemingly little direct financial relevance. However, although these statements were largely generic, vague expressions rather than clear plans, we discovered that the more such statements CEOs made, the better their companies fared on the stock market when stock prices tumbled globally. Follow-up explorations unveiled a negative association between CEO human care statements and stock volatility, meaning that market participants discounted these companies’ future earnings less. Our explorations suggest that it pays off for CEOs to go beyond mere financial information and show some humanity, with implications for downstream theorizing about CEO impression management. |
| Keywords: | financial analysts; CEOs; conference calls; impression management; stock market |
| JEL: | F3 G3 |
| Date: | 2024–12–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:122127 |
| By: | Nenova, Tsvetelina |
| Abstract: | This paper provides novel empirical evidence on portfolio rebalancing in international bond markets through the prism of investors’ demand for bonds. Using a granular dataset of global government and corporate bond holdings by mutual funds domiciled in the world’s two largest currency areas, I estimate heterogeneous and time varying demand elasticities for bonds. Safe assets such as US Treasuries or German Bunds face especially inelastic demand from investment funds compared to riskier bonds. But spillovers from these safe assets to global bond markets are strikingly different. Funds substitute US Treasuries with global bonds, including risky corporate and emerging market bonds, whereas German Bunds are primarily substitutable within a narrow set of euro area safe government bonds. Substitutability deteriorates in times of stress, impairing the transmission of monetary policy. JEL Classification: F30, G11, G15 |
| Keywords: | international finance, portfolio choice, safe assets |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253159 |
| By: | Cecchetti, Stephen G.; Lumsdaine, Robin L.; Peltonen, Tuomas; Sánchez Serrano, Antonio |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:srk:srkasc:202516 |
| By: | Chuck Fang; Itay Goldstein |
| Abstract: | Target allocation funds (TAFs) make predictable rebalancing trades to maintain portfolio weights across asset classes. During the COVID-19 stock market crash, TAFs sold $59 billion of bond fund shares and simultaneously purchased a similar amount of equity fund shares. We show that TAF rebalancing triggers strategic complementarity: bond mutual funds facing larger rebalancing-induced sales by TAFs experienced greater outflows from other non-TAF investors. This effect was particularly pronounced for illiquid bond funds and amplified total bond fund outflows during COVID-19 by an additional $27 billion. Rebalancing by TAFs, together with the strategic amplification by other investors, transmits equity market shocks to bond returns, accounting for 17% of the rise in stock-bond correlation over the past decade. |
| JEL: | G01 G12 G23 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34509 |
| By: | Giuseppe Matera |
| Abstract: | Economic behavior is shaped not only by quantitative information but also by the narratives through which such information is communicated and interpreted (Shiller, 2017). I show that narratives extracted from earnings calls significantly improve the prediction of both realized earnings and analyst expectations. To uncover the underlying mechanisms, I introduce a novel text-morphing methodology in which large language models generate counterfactual transcripts that systematically vary topical emphasis (the prevailing narrative) while holding quantitative content fixed. This framework allows me to precisely measure how analysts under- and over-react to specific narrative dimensions. The results reveal systematic biases: analysts over-react to sentiment (optimism) and under-react to narratives of risk and uncertainty. Overall, the analysis offers a granular perspective on the mechanisms of expectation formation through the competing narratives embedded in corporate communication. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.15214 |
| By: | Mohammed Amine Rharbi (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon, UTLN - Université de Toulon); Sami Ben Larbi (CERGAM de Toulon - Centre d'Études et de Recherche en Gestion d'Aix-Marseille/Equipe de recherche de Toulon - CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon - IAE Toulon - Institut d'Administration des Entreprises (IAE) - Toulon - UTLN - Université de Toulon); Nicolas Aubert (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon, AMU IAE - Institut d'Administration des Entreprises (IAE) - Aix-en-Provence - AMU - Aix Marseille Université) |
| Abstract: | Purpose Based on a theoretical framework that favors catering theory, this paper aims to determine whether French companies respond to investor demand and preference for share repurchases and dividend payments. Design/methodology/approach The study is based on data from the Thomson Reuters Eikon database and focuses on French companies listed on the CAC All-Tradable index from 2000 to 2023. The study sample comprises 183 companies over 24 years, representing a total of 4, 392 observations. The authors employ logistic regression to analyze the impact of independent variables on payout decisions. Findings The study finds evidence that French companies negatively respond to investor demand for dividend payments, share repurchases, and difference premiums. Originality/value To the best of the authors' knowledge, this study is the first to test catering theory on share repurchase in the French context and to study the catering effect on investor preferences. To do so, the study empirically examines whether the listed French companies react to investor demands and preferences for different forms of compensation, specifically the distribution of dividends and share buybacks. |
| Keywords: | difference premium, repurchase premium, dividend premium, catering theory, dividend, share buyback, share buyback dividend catering theory dividend premium repurchase premium difference premium |
| Date: | 2025–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05369144 |