Malcolm Baker

2004, A catering theory of dividends (2008)

Empirical evidence of imperfect integration across world capital markets suggests a role for cross-border arbitrage by multinationals. Consistent with multinational arbitrage as a determinant of...

Malcolm Baker, Jeffrey Wurgler, Raj Aggarwal, Katharine Baker, Y Cohen, Xavier Gabaix, ...

financial support from the Division of Research of the Harvard Business School. The views expressed herein are those of the authors and not necessarily those of the National Bureau of Economic...

Investor protection and corporate valuation 1 (2007)

Rafael La Porta, Florencio Lopez-de-silanes, Andrei Shleifer, Robert Vishny, Research Assistance, Malcolm Baker, ...

We present a model of the effects of legal protection of minority shareholders and of cash flow ownership by a controlling shareholder on the valuation of firms. We then test this model using a...

The Effect of Dividends on Consumption (2007)

Baker, Malcolm., Wurgler, Jeffrey.

Brookings Papers on Economic Activity - 2007, 1

Catering Through Nominal Share Prices (2007)

Catering Through Nominal Share Prices (2007)

We propose and test a catering theory of nominal stock prices. The theory predicts that when investors place higher valuations on low-price firms, managers will maintain share prices at lower levels,...

Public Images for Private Spaces? The Place of Sculpture in the Georgian Domestic Interior (2007)

We propose and test a catering theory of nominal stock prices. The theory predicts that when investors place higher valuations on low-price firms, managers will maintain share prices at lower levels,...

Baker, Malcolm

This paper examines the increasing prominence of sculpture within the Georgian interior in terms of the relationship between the (apparently) public nature of sculpture and recent discussions of the...

Government bonds and the cross-section of stock returns∗ (2006)

Baker, Malcolm, Wurgler, Jeffery

We document that U.S. government bonds comove more strongly with “bond-like stocks”— stocks of large, mature, low-volatility, profitable, dividend-paying firms that are neither high growth nor...

Government bonds and the cross-section of stock returns∗ (2006)

Baker, Malcolm, Wurgler, Jeffery

We document that U.S. government bonds comove more strongly with “bond-like stocks”— stocks of large, mature, low-volatility, profitable, dividend-paying firms that are neither high growth nor...

GOVERNMENT BONDS AND THE CROSS-SECTION OF STOCK RETURNS (2005)

GOVERNMENT BONDS AND THE CROSS-SECTION OF STOCK RETURNS (2005)

We document that U.S. government bonds comove more strongly with “bond-like stocks” stocks of large, mature, low-volatility, profitable, dividend-paying firms that are neither high growth nor...

The effect of dividends on consumption (2005)

We document that U.S. government bonds comove more strongly with “bond-like stocks” stocks of large, mature, low-volatility, profitable, dividend-paying firms that are neither high growth nor...

Baker, Malcolm, Nagel, Stefan, Wurgler, Jeffrey

Classical models predict that the division of stock returns into dividends and capital appreciation does not affect investor consumption patterns, while mental accounting and other economic frictions...

The effect of dividends on consumption (2005)

Baker, Malcolm, Nagel, Stefan, Wurgler, Jeffrey

Classical models predict that the division of stock returns into dividends and capital appreciation does not affect investor consumption patterns, while mental accounting and other economic frictions...

CAN MUTUAL FUND MANAGERS PICK STOCKS? EVIDENCE FROM THEIR TRADES PRIOR TO EARNINGS ANNOUNCEMENTS (2005)

Baker, Malcolm, Litov, Lubomir, Wachter, Jessica A., Wurgler, Jeffrey

We measure the stock-picking skill of mutual fund managers based on the returns realized around the subsequent earnings announcements of the stocks that they hold and trade. Relative to standard...

CAN MUTUAL FUND MANAGERS PICK STOCKS? EVIDENCE FROM THEIR TRADES PRIOR TO EARNINGS ANNOUNCEMENTS (2005)

Baker, Malcolm, Litov, Lubomir, Wachter, Jessica A., Wurgler, Jeffrey

We measure the stock-picking skill of mutual fund managers based on the returns realized around the subsequent earnings announcements of the stocks that they hold and trade. Relative to standard...

STOCK MARKET VALUATIONS AND FOREIGN DIRECT INVESTMENT (2004)

STOCK MARKET VALUATIONS AND FOREIGN DIRECT INVESTMENT (2004)

We outline and test two theories of foreign direct investment based on capital market mispricing. The “cheap assets” or “fire-sale” theory considers FDI inflows as the purchase of undervalued...

"No cap or wig but a thin hair upon it": Hair and the Male Portrait Bust in England around 1750 (2004)

We outline and test two theories of foreign direct investment based on capital market mispricing. The “cheap assets” or “fire-sale” theory considers FDI inflows as the purchase of undervalued...

Baker, Malcolm.

Eighteenth-Century Studies - Volume 38, Number 1, Fall 2004

Behavioral Corporate Finance: A Survey (2004)

Baker, Malcolm, Ruback, Richard S., Wurgler, Jeffrey

Research in behavioral corporate finance takes two distinct approaches. The first emphasizes that investors are less than fully rational. It views managerial financing and investment decisions as...

Behavioral Corporate Finance: A Survey (2004)

Baker, Malcolm, Ruback, Richard S., Wurgler, Jeffrey

Research in behavioral corporate finance takes two distinct approaches. The first emphasizes that investors are less than fully rational. It views managerial financing and investment decisions as...

Pseudo Market Timing and Predictive Regressions (2004)

Baker, Malcolm, Taliaferro, Ryan, Wurgler, Jeffrey

A number of studies claim that aggregate managerial decision variables, such as aggregate equity issuance, have power to predict stock or bond market returns. Recent research argues that these...

Pseudo Market Timing and Predictive Regressions (2004)

Baker, Malcolm, Taliaferro, Ryan, Wurgler, Jeffrey

A number of studies claim that aggregate managerial decision variables, such as aggregate equity issuance, have power to predict stock or bond market returns. Recent research argues that these...

Can mutual fund managers pick stocks? Evidence from their trades prior to earnings announcements (2004)

Baker, Malcolm, Litov, Lubomir, Wachter, Jessica A., Wurgler, Jeffrey

We test whether fund managers have stock-picking skill by comparing their holdings and trades prior to earnings announcements with the returns realized at those events. This approach largely avoids...

Can mutual fund managers pick stocks? Evidence from their trades prior to earnings announcements (2004)

Baker, Malcolm, Litov, Lubomir, Wachter, Jessica A., Wurgler, Jeffrey

We test whether fund managers have stock-picking skill by comparing their holdings and trades prior to earnings announcements with the returns realized at those events. This approach largely avoids...

The Stock Market and Investment: Evidence from FDI Flows (2004)

The Stock Market and Investment: Evidence from FDI Flows (2004)

Foreign direct investment offers a rich laboratory in which to study the broader economic effects of securities market mispricing. We outline and test two mispricing-based theories of FDI. The...

INVESTOR SENTIMENT AND THE CROSS-SECTION OF STOCK RETURNS (2003)

Foreign direct investment offers a rich laboratory in which to study the broader economic effects of securities market mispricing. We outline and test two mispricing-based theories of FDI. The...

Investor sentiment and the cross-section of stock returns (2003)

We examine how investor sentiment affects the cross-section of stock returns. Theory predicts that a broad wave of sentiment will disproportionately affect stocks whose valuations are highly...

Investor Sentiment and the Cross-Section of Stock Returns (2003)

We examine how investor sentiment affects the cross-section of stock returns. Theory predicts that a broad wave of sentiment will disproportionately affect stocks whose valuations are highly...

INVESTOR SENTIMENT AND THE CROSS-SECTION OF STOCK RETURNS (2003)

We examine how investor sentiment affects the cross-section of stock returns. Theory predicts that a broad wave of sentiment will disproportionately affect stocks whose valuations are highly...

Investor sentiment and the cross-section of stock returns (2003)

We examine how investor sentiment affects the cross-section of stock returns. Theory predicts that a broad wave of sentiment will disproportionately affect stocks whose valuations are highly...

Investor Sentiment and the Cross-Section of Stock Returns (2003)

We examine how investor sentiment affects the cross-section of stock returns. Theory predicts that a broad wave of sentiment will disproportionately affect stocks whose valuations are highly...

Appearing and disappearing dividends: The link to catering incentives (2003)

We examine how investor sentiment affects the cross-section of stock returns. Theory predicts that a broad wave of sentiment will disproportionately affect stocks whose valuations are highly...

Appearing and disappearing dividends: The link to catering incentives (2003)

We document a close link between fluctuations in the propensity to pay dividends and catering incentives. First, we use the methodology of Fama and French (2001) to identify a total of four distinct...

WHY ARE DIVIDENDS DISAPPEARING? AN EMPIRICAL ANALYSIS (2002)

We document a close link between fluctuations in the propensity to pay dividends and catering incentives. First, we use the methodology of Fama and French (2001) to identify a total of four distinct...

Why are dividends disappearing? An empirical analysis (2002)

We investigate the causes of time-series fluctuations in the propensity to pay dividends,including the post-1978 decline documented by Fama and French (2001). We consider explanations based on...

Why are dividends disappearing? An empirical analysis (2002)

We investigate the causes of time-series fluctuations in the propensity to pay dividends, including the post-1978 decline documented by Fama and French (2001). We consider explanations based on...

WHY ARE DIVIDENDS DISAPPEARING? AN EMPIRICAL ANALYSIS (2002)

We investigate the causes of time-series fluctuations in the propensity to pay dividends, including the post-1978 decline documented by Fama and French (2001). We consider explanations based on...

A Catering Theory of Dividends (2002)

We investigate the causes of time-series fluctuations in the propensity to pay dividends,including the post-1978 decline documented by Fama and French (2001). We consider explanations based on...

A Catering Theory of Dividends (2002)

We develop a theory in which the decision to pay dividends is driven by investor demand. Managers cater to investors by paying dividends when investors put a stock price premium on payers and not...

Market Timing and Capital Structure (2002)

We develop a theory in which the decision to pay dividends is driven by investor demand. Managers cater to investors by paying dividends when investors put a stock price premium on payers and not...

Malcolm Baker Harvard, Malcolm Baker, Jeffrey Wurgler

We trace capital structure to past market valuations. Unlevered firms tend to be those that raised funds when their valuations were high, as measured by the market-to-book ratio. Levered firms tend...

Malcolm Baker (2002)

Harvard Business School, Malcolm Baker, Robin Greenwood, Jeffrey Wurgler

this paper, we ask whether time series variation in the maturity of debt issues is tied to predictability in excess long-term bond returns. Relative to the literature on equity financing patterns,...

Do firms borrow at the lowest-cost maturity? The long-term share in debt issues and predictable variation in bond returns (2001)

Do firms borrow at the lowest-cost maturity? The long-term share in debt issues and predictable variation in bond returns (2001)

We document that firms tend to borrow at the lowest-cost maturity. In aggregate time series data, the share of long-term debt issues in total debt issues is negatively related to subsequent excess...

When Does the Market Matter? Stock Prices and the Investment of Equity-Dependent Firms (2001)

We document that firms tend to borrow at the lowest-cost maturity. In aggregate time series data, the share of long-term debt issues in total debt issues is negatively related to subsequent excess...

Baker, Malcolm, Stein, Jeremy C., Wurgler, Jeffrey

We use a simple model of corporate investment to determine when investment will be sensitive to non-fundamental movements in stock prices. The key cross-sectional prediction of the model is that...

When Does the Market Matter? Stock Prices and the Investment of Equity-Dependent Firms (2001)

Baker, Malcolm, Stein, Jeremy C., Wurgler, Jeffrey

We use a simple model of corporate investment to determine when investment will be sensitive to non-fundamental movements in stock prices. The key cross-sectional prediction of the model is that...

The Equity Share in New Issues and Aggregate Stock Returns (1999)

A Grand Design : The Art of the Victoria and Albert Museum (1997)

The share of equity issues in total new equity and debt issues is a strong predictor of U.S. stock market returns between 1928 and 1997. In particular, firms issue relatively more equity than debt...

Baker, Malcolm (ed.), Richardson, Brenda (ed.)

Catálogo de A Grand Design: The Art of of the Victoria and Albert Museum, exposición que reunió más de 250 obras de la colección del Victoria and Albert Museum, en Londres, Inglaterra,...

A Grand Design : The Art of the Victoria and Albert Museum (1997)

Baker, Malcolm (ed.), Richardson, Brenda (ed.)

1-85177-300-2

Behavioral Corporate Finance: A Survey

Malcolm Baker, Richard S. Ruback, Jeffrey Wurgler

Research in behavioral corporate finance takes two distinct approaches. The first emphasizes that investors are less than fully rational. It views managerial financing and investment decisions as...

Corporate Financing Decisions When Investors Take the Path of Least Resistance

Malcolm Baker, Joshua Coval, Jeremy C. Stein

We explore the consequences for corporate financial policy that arise when investors exhibit inertial behavior. One implication of investor inertia is that, all else equal, a firm pursuing a strategy...

A Retention Bar For A Dislocated Hip In A Dog

Baker, Malcolm, Johansson, Arne B.

Market Liquidity as a Sentiment Indicator

Classical models predict that the division of stock returns into dividends and capital appreciation does not affect investor consumption patterns, while mental accounting and other economic frictions...

Malcolm Baker, Jeremy C. Stein

We build a model that helps explain why increases in liquidity-such as lower bid-ask spreads, a lower price impact of trade, or higher turnoverï£§predict lower subsequent returns in both...

When Does the Market Matter? Stock Prices and the Investsment of Equity-Dependent Firms

Malcolm Baker, Jeremy C. Stein, Jeffrey Wurgler

We use a simple model to outline the conditions under which corporate investment will be sensitive to non-fundamental movements in stock prices. The key cross-sectional prediction of the model is...

A Retention Bar For A Dislocated Hip In A Dog

Baker, Malcolm, Johansson, Arne B.

Investor Sentiment in the Stock Market

Real investors and markets are too complicated to be neatly summarized by a few selected biases and trading frictions. The "top down" approach to behavioral finance focuses on the measurement of...

The Equity Share in New Issues and Aggregate Stock Returns

In classical models the division of stock returns into dividends and capital gains has no "real" consequence for investor consumption. This paper, using two micro data sets that provide...

Market Timing and Capital Structure

The share of equity issues in total new equity and debt issues is a strong predictor of U.S. stock market returns between 1928 and 1997. In particular, firms issue relatively more equity than debt...

A Catering Theory of Dividends

It is well known that firms are more likely to issue equity when their market values are high, relative to book and past market values, and to repurchase equity when their market values are low. We...

Investor Sentiment and the Cross-Section of Stock Returns

We propose that the decision to pay dividends is driven by prevailing investor demand for dividend payers. Managers cater to investors by paying dividends when investors put a stock price premium on...

MALCOLM BAKER, JEFFREY WURGLER

We study how investor sentiment affects the cross-section of stock returns. We predict that a wave of investor sentiment has larger effects on securities whose valuations are highly subjective and...

Predicting Returns with Managerial Decision Variables: Is There a Small-Sample Bias?

MALCOLM BAKER, RYAN TALIAFERRO, JEFFREY WURGLER*

Many studies find that aggregate managerial decision variables, such as aggregate equity issuance, predict stock or bond market returns. Recent research argues that these findings may be driven by an...

Investor Sentiment in the Stock Market

Investor sentiment, defined broadly, is a belief about future cash flows and investment risks that is not justified by the facts at hand. The question is no longer whether investor sentiment affects...

In classical models the division of stock returns into dividends and capital gains has no "real" consequence for investor consumption. This paper, using two micro data sets that provide...

Corporate financing decisions when investors take the path of least resistance

In classical models the division of stock returns into dividends and capital gains has no "real" consequence for investor consumption. This paper, using two micro data sets that provide...

Baker, Malcolm, Coval, Joshua, Stein, Jeremy C.

Appearing and disappearing dividends: The link to catering incentives

The maturity of debt issues and predictable variation in bond returns

Limited arbitrage in mergers and acquisitions

Baker, Malcolm, Savasoglu, Serkan

Market liquidity as a sentiment indicator

Baker, Malcolm, Stein, Jeremy C.

When Does The Market Matter? Stock Prices And The Investment Of Equity-Dependent Firms

Malcolm Baker, Jeremy C. Stein, Jeffrey Wurgler

We use a simple model to outline the conditions under which corporate investment is sensitive to nonfundamental movements in stock prices. The key prediction is that stock prices have a stronger...

When Does the Market Matter? Stock Prices and the Investment of Equity-Dependent Firms

Malcolm Baker, Jeremy C. Stein, Jeffrey Wurgler

We use a simple model of corporate investment to determine when investment will be sensitive to non-fundamental movements in stock prices. The key cross-sectional prediction of the model is that...

Market Liquidity as a Sentiment Indicator

Malcolm Baker, Jeremy C. Stein

We build a model that helps explain why increases in liquidity - such as lower bid-ask spreads, a lower price impact of trade, or higher share turnover - predict lower subsequent returns in both...

A Catering Theory of Dividends

Appearing and Disappearing Dividends: The Link to Catering Incentives

We develop a theory in which the decision to pay dividends is driven by investor demand. Managers cater to investors by paying dividends when investors put a stock price premium on payers and not...

Investor Sentiment and the Cross-Section of Stock Returns

We document a close link between fluctuations in the propensity to pay dividends and catering incentives. First, we use the methodology of Fama and French (2001) to identify a total of four distinct...