Equity offerings, stock price crash risk, and the impact of securities regulation: international evidence

We examine whether earnings manipulation around seasoned equity offerings (SEOs) is associated with an increase in the likelihood of a stock price crash post-issue and test whether the enactment of securities regulations attenuate the relation between SEOs and crash risk. Empirical evidence documents that managerial tendency to conceal bad news increases the likelihood of a stock price crash (Jin and Myers, 2006; Hutton, Marcus, and Tehranian, 2009). We test this hypothesis using a sample of firms from 29 EU countries that enacted the Market Abuse Directive (MAD). Consistent with our hypothesis, we find that equity issuers that engage in earnings management experience a significant increase in crash risk post-SEO relative to control groups of non-issuers; this effect is stronger for equity issuers with poor information environments. In addition, our findings show a significant decline in crash risk post-issue after the enactment of MAD that is stronger for firms that actively manage earnings. This decline in post-issue crash risk is more effective in countries with high ex-ante institutional quality and enforcement. These results suggest that the implementation of MAD helps to mitigate managers’ ability to manipulate earnings around SEOs.

Automatic distinction of Fernando Pessoas’ heteronyms

Text Mining has opened a vast array of possibilities concerning automatic information retrieval from large amounts of text documents. A variety of themes and types of documents can be easily analyzed. More complex features such as those used in Forensic Linguistics can gather deeper understanding from the documents, making possible performing di cult tasks such as author identi cation. In this work we explore the capabilities of simpler Text Mining approaches to author identification of unstructured documents, in particular the ability to distinguish poetic works from two of Fernando Pessoas' heteronyms: Alvaro de Campos and Ricardo Reis. Several processing options were tested and accuracies of 97% were reached, which encourage further developments.

Mother-to-infant emotional involvement at birth

Objectives. To study mother-to-infant emotional involvement at birth, namely factors (socio-demographics, previous life events, type of delivery, pain at childbirth, support from partner, infant characteristics, early experiences with the newborn, and mother’s mood) that interfere with the mother’s positive, negative and not clear emotions toward the newborn. Methods. The Bonding Scale (an extended Portuguese version of the ‘New Mother-to-Infant Bonding Scale’) and the Edinburgh Postnatal Depression Scale were administrated during the first after delivery days to 315 mothers recruited at Ju´lio Dinis Maternity Hospital (MJD, Porto, Portugal). Results. A worse emotional involvement with the newborn was observed when the mother was unemployed, unmarried, had less than grade 9, previous obstetrical/psychological problems or was depressed, as well as when the infant was female, had neonatal problems or was admitted in the intensive care unit. Lower total bonding results were significantly predicted when the mother was depressed and had a lower educational level; being depressed, unemployed and single predicted more negative emotions toward the infant as well. No significant differences in the mother-to-infant emotional involvement were obtained for events related to childbirth, such as type of delivery, pain and partner support, or early experiences with the newborn; these events do not predict mother’s bonding results either. Conclusion. The study results support the need for screening and supporting depressed, unemployed and single mothers, in order to prevent bonding difficulties with the newborn at birth.