Lauren Cohen

National Bureau of Economic Research

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Christopher J. Malloy

University of Oklahoma

Umit G. Gurun

National Bureau of Economic Research

Andrea Frazzini

Capital University

Scott Duke Kominers

Harvard University

Huaizhi Chen

University of Notre Dame

Dong Lou

London School of Economics and Political Science

Karl B. Diether

Brigham Young University

Quoc Hung Nguyen

Ho Chi Minh City Open University

Joshua D. Coval

National Bureau of Economic Research

Jiahua Xu

University of Pennsylvania

Cooperative Institutions

National Bureau of Economic Research

Duke University

Clinical Research Institute

Harvard University

Yale University

Harvard University Press

Duke Medical Center

Boston Public Library

University of Hong Kong

Natural History Museum

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Building India’s 2.0: PayNearby

Lauren Cohen Spencer C. N. Hagist

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The Small World of Investing: Board Connections and Mutual Fund Returns

Lauren Cohen Andrea Frazzini Christopher J. Malloy

This paper uses social networks to identify information transfer in security markets.We focus on connections between mutual fund managers and corporate board members via shared education networks.We find that portfolio managers place larger bets on firms they are connected to through their network, and perform significantly better on these holdings relative to their non-connected holdings.A replicating portfolio of connected stocks outperforms a replicating portfolio of non-connected stocks by up to 8.4% per year.Returns are concentrated around corporate news announcements, consistent with mutual fund managers gaining an informational advantage through the education networks.Our results suggest that social networks may be an important mechanism for information flow into asset prices.

Mutual fund

10.3386/w13121

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Citations (107)

Decoding Inside Information

RePEc: Research Papers in Economics (2010)

Lauren Cohen Christopher J. Malloy Łukasz Pomorski

Using a simple empirical strategy, we decode the information in insider trades. Exploiting the fact that insiders trade for a variety of reasons, we show that there is predictable, identifiable insider trading that is not informative for the future of firms. Stripping away these routine trades, which comprise over half the entire universe of insider trades, leaves a set of information-rich trades that contains all the predictive power in the insider trading universe. A portfolio strategy that focuses solely on opportunistic insider trades yields value-weight abnormal returns of 82 basis points per month, while the abnormal returns associated with routine traders are essentially zero. Further, opportunistic trades predict future news and events at a firm level, while routine trades do not.

Insider trading

Predictive power

Value (mathematics)

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Resident Networks and Corporate Connections: Evidence from World War II Internment Camps

The Journal of Finance (2016)

Lauren Cohen Umit G. Gurun Christopher J. Malloy

ABSTRACT Using customs and port authority data, we show that firms are significantly more likely to trade with countries that have a large resident population near their firm headquarters, and that these connected trades are their most valuable international trades. Using the formation of World War II Japanese internment camps to isolate exogenous shocks to local ethnic populations, we identify a causal link between local networks and firm trade. Firms are also more likely to acquire target firms, and report increased segment sales, in connected countries. Our results point to a surprisingly large role of immigrants as economic conduits for firms.

Port (circuit theory)

First world war

10.1111/jofi.12407

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Citations (67)

Patent Trolling Isn't Dead—It's Just Moving to Delaware

Lauren Cohen Umit G. Gurun Scott Duke Kominers

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Dianrong: Marketplace Lending, Blockchain, and 'The New Finance' in China

Christopher J. Malloy Lauren Cohen Anthony K. Woo

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Industry Window Dressing

SSRN Electronic Journal (2016)

Huaizhi Chen Lauren Cohen Dong Lou

We explore a new mechanism by which investors take correlated shortcuts, and present evidence that managers undertake actions – in the form of sales management – to take advantage of these shortcuts. Specifically, we exploit a regulatory provision wherein a firm’s primary industry is determined by the highest sales segment. Exploiting this regulation, we provide evidence that investors classify operationally nearly identical firms vastly differently depending on their placement around this sales cut-off. Moreover, managers appear to exploit this by manipulating sales to be just over the cutoff in favorable industries. Further evidence suggests that managers then engage in activities to realize large, tangible benefits from this opportunistic action.

10.2139/ssrn.2758785

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Internal Deadlines, Drug Approvals, and Safety Problems

SSRN Electronic Journal (2019)

Lauren Cohen Umit G. Gurun Danielle Li

Absent explicit quotas, incentives, reporting, or fiscal year-end motives, drug approvals around the world surge in December, at month-ends, and before respective major national holidays. Drugs approved before these informal deadlines are associated with significantly more adverse effects, including more hospitalizations, life-threatening incidents, and deaths – particularly, drugs most rushed through the approval process. These patterns are consistent with a model in which regulators rush to meet internal production benchmarks associated with salient calendar periods: this “desk-clearing” behavior results in more lax review, leading both to increased output and increased safety issues at particular—and predictable—periodicities over the year.

Drug approval

10.2139/ssrn.3427338

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Box Jumping: Portfolio Recompositions to Achieve Higher Morningstar Ratings

Lauren Cohen David Kim Eric C. So

10.2139/ssrn.4971228

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The Golden Revolving Door

SSRN Electronic Journal (2024)

Ling Cen Lauren Cohen Jing Wu Fan Zhang

Revolving door

Golden hour (medicine)

10.2139/ssrn.4881200

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