We show that the personal traits of analysts, as revealed by their political donations, influence their forecasting behavior and stock prices. Analysts who contribute primarily to the Republican Party adopt a more conservative fore- casting style. Their earnings forecast revisions are less likely to deviate from the forecasts of other analysts and are less likely to be bold. Their stock recommen- dations also contain more modest upgrades and downgrades. Overall, these analysts produce better quality research, which is recognized and rewarded by their employers, institutional investors, and the media. Stock market participants, how- ever, do not fully recognize their superior ability as the market reaction following revisions by these analysts is weaker.

Using data from 11 major international markets that celebrate six cultural New Year holidays that do not occur on January 1, we find that stock markets tend to outperform in days surrounding a cultural New Year. After controlling for firm characteristics, an average stock earns 2.5% higher abnormal returns across all markets in the month of a cultural New Year relative to other months of the year. Further evidence suggests that positive holiday moods, in conjunction with cash infusions prior to a cultural New Year, produce elevated stock prices, particularly among those stocks most preferred and traded by individual investors.

Corporate site visits provide investors with opportunities to obtain non-standard, tailored "soft" information about the firm. In this study, we investigate the impact of information disclosed from corporate site visits on stock market stability from the perspective of stock return volatility. Our findings suggest that it is the information disclosed rather than the visits themselves that significantly reduce stock return volatility, primarily by mitigating information asymmetry. Moreover, we observe that the volatility-mitigating effect of site visits is more pronounced when the visit information better aligns with investors' concerns and when it is more effectively disseminated. Our study contributes to the literature by demonstrating that the timely disclosure of site visit details serves as a stabilizing mechanism for stock prices through effective information mining and dissemination.

We examine whether large language models (LLMs) can extract contextualized representation of Chinese public news articles to predict stock returns. Based on representativeness and influences, we consider seven LLMs: BERT, RoBERTa, FinBERT, Baichuan, ChatGLM, InternLM, and their ensemble model. We show that news tones and return forecasts extracted by LLMs from Chinese news significantly predict future returns. The value-weighted long-minus-short portfolios yield annualized returns between 35% and 67%, depending on the model. Building on the return predictive power of LLM signals, we further investigate its implications for information efficiency. The LLM signals contain firm fundamental information, and it takes two days for LLM signals to be incorporated into stock prices. The predictive power of the LLM signals is stronger for firms with more information frictions, more retail holdings and for more complex news. Interestingly, many investors trade in opposite directions of LLM signals upon news releases, and can benefit from the LLM signals. These findings suggest LLMs can be helpful in processing public news, and thus contribute to overall market efficiency.

This paper studies the transmission of monetary policy to the stock market through investors’ discount factors. To isolate this channel, we investigate the effect of US monetary policy surprises on the ratio of prices of the same stock listed simultaneously in Hong Kong and Mainland China, and thereby control for revisions in cash-flow expectations. We find this channel to be strong and asymmetric, with the effect driven by surprise monetary policy interest rate cuts. A 100 basis point surprise cut results in a 30 basis point increase in the ratio of stock prices over 5 days. These results suggest significant slow-moving reductions in stock market risk premia following accommodating monetary policy surprises.

This paper examines the effects of superstitious psychology on investors’ decision making in the context of Mercury retrograde, a special astronomical phenomenon meaning “everything going wrong”. Using natural experiments in the Chinese stock market, we find a significant decline in stock prices, approximately -3.14% in the vicinity of Mercury retrogrades, with a subsequent reversal following these periods. The Mercury effect is robust after considering seasonality, the calendar effect, and well-known firm-level characteristics. Our mechanism tests are consistent with model-implied conjectures that stocks covered by higher investor attention are more influenced by superstitious psychology in the extensive and intensive channels. A superstitious hedge strategy motivated by our findings can generate an average annualized market-adjusted return of 8.73%.

We use the event study method to assess the impact of China's National Centralized Drug Procurement (NCDP) policy on the stock price of A-share listed companies in pharmaceutical industry. And the empirical evidence reveals that the policy has a negative effect on the share prices of firms won the bids in the past six centralized procurement. The stock prices of winning bidders were more negatively affected than those of non-winning bidders. If the winning bid price continues to be depressed, we cannot rule out the possibility of a collective abandonment of bidding by quality manufacturers.

Factoring financing is the most widely used form of supply chain finance, which has been adopted by more and more enterprises. The existing literature focuses on the motivation of suppliers to adopt factoring financing and the factors that affect the development of factoring. However, little attention is paid to the results of factoring. This study uses the event study method, draws on the Extended Resource based theory (ERBT), discussing how the factoring business announcement affects the stock market value of listed companies from the perspective of competitive advantage and the firm's own characteristics. By manually collecting 205 factoring business announcements from 115 Chinese listed companies from October 2019 to December 2022, we found that: (1) from the perspective of competitive advantage, the announcement of factoring business by non-Combination of Industry and Finance enterprises or their holding enterprises has more positive impact on the stock price of the enterprises. There is no obvious relationship between the size of factoring quota and stock price. (2) From the perspective of the enterprise's own characteristics, the announcement of factoring business by state-owned enterprises and small-scale enterprises can have a positive impact on the stock price of the enterprise. Before and after the Civil Code came into effect, there was no significant difference in the relationship between factoring business announcements and stock prices. This study uses secondary data to fill the gap in the study of the impact of factoring announcements on stock market value. This paper discusses the relationship between factoring business announcement and stock market value from the perspective of competitive advantage for the first time, providing theoretical guidance for managers to adopt factoring business under what circumstances. In addition, this study also provides documentation for the empirical study of factoring business announcements in China.

This paper examines the effects of superstitious psychology on investors’ decision making in the context of Mercury retrograde, a special astronomical phenomenon meaning “everything going wrong”. Using natural experiments in the Chinese stock market, we find a significant decline in stock prices, approximately -3.14% in the vicinity of Mercury retrogrades, with a subsequent reversal following these periods. The Mercury effect is robust after considering seasonality, the calendar effect, and well-known firm-level characteristics. Our mechanism tests are consistent with model-implied conjectures that stocks covered by higher investor attention are more influenced by superstitious psychology in the extensive and intensive channels. A superstitious hedge strategy motivated by our findings can generate an average annualized market-adjusted return of 8.73%.

We analyze the relationship between insider trading density and the future stock returns in Chinese listed companies. We introduce a new aspect of the trading pattern, insider trading density, to investigate the information advantage held by insiders. Insiders who trade at a low density during their tenure are less likely to be expected to trade than high trading density insiders. The expectedness of trading patterns reflects insiders’ trading incentives and conveys valuable information to predict future stock prices. Controlling for company, deal, and insider-specific characteristics, we find that low trading density insiders earn higher excess returns than high trading density insiders in a portfolio mimicking long strong purchases and short strong sales. In addition, we show that the insider’s position is a source of information advantage: prominent officers such as CEOs and CFOs are more likely to be low trading density insiders, while non-executive directors and supervisors are more likely to be high trading density insiders.