Three Essays in Behavioral and Corporate Finance

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School of Business | Doctoral thesis (article-based) | Defence date: 2024-05-03
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Authors

Date

2024

Department

Rahoituksen laitos
Department of Finance

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Mcode

Degree programme

Language

en

Pages

24 + app. 228

Series

Aalto University publication series DOCTORAL THESES, 86/2024

Abstract

This dissertation comprises three essays in behavioral and corporate finance. The first essay examines employees' open-market purchases of own-company call options. Using data from Finland, I show that employees play an important role in the retail option market and their purchases contain price-relevant information. The second essay focuses on employee stock option (ESO) grantees. Specifically, I analyze how their outside wealth influences their decisions. I find that employees with diversified stock portfolios tend to hold on to their options longer. My results underscore the importance of external wealth in shaping the decisions of ESO grantees. Finally, the third essay examines the effect of local COVID-19 pandemic experiences on sell-side analysts' earnings forecasts. I find that analysts in areas severely affected by the pandemic tend to conform more closely to consensus forecasts. The results point to a shift in risk attitudes driven by the crisis conditions, rather than an increase in forecast pessimism. Collectively, these essays provide novel insights on the decision-making processes of individuals in the financial sector, emphasizing the role of personal and external factors in shaping financial behaviors and market outcomes.

Description

Supervising professor

Keloharju, Matti, Prof., Aalto University, Department of Finance, Finland

Thesis advisor

Ungeheuer, Michael, Assoc. Prof., Aalto University, Department of Finance, Finland

Keywords

behavioral finance, corporate finance

Other note

Parts

  • Vacca, Matteo. Insider Trading With Options. Unpublished manuscript.
  • Vacca, Matteo. Diversification at Work: Evidence from Employee Stock Options. Unpublished manuscript.
  • Vacca, Matteo. Panic Herding: Analysts’ COVID-19 Experiences and the Interpretation of Earnings News. Unpublished manuscript.

Citation

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https://urn.fi/URN:ISBN:978-952-64-1784-4

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[diss] Kauppakorkeakoulu / BIZ