1 option
Is Stock Index Membership for Sale? / Kun Li, Xin (Kelly) Liu, Shang-Jin Wei.
- Format:
- Book
- Author/Creator:
- Li, Kun.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w29365.
- NBER working paper series no. w29365
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2021.
- Summary:
- While major stock market indices are followed by large monetary investments, we document that membership decisions for S&P 500 have a nontrivial amount of discretion. We show that firms' purchases of S&P ratings appear to improve their chance of entering the index (but purchases of Moody's ratings do not). Furthermore, firms tend to purchase more S&P ratings when there are openings in the index membership. Such a pattern is also confirmed by an event study that explores a rule change on index membership in 2002. Finally, discretionary additions exhibit subsequent deterioration in financial performance relative to rules-based additions.
- Notes:
- Print version record
- October 2021.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.