Event

Market Manipulation and Innovation

  • Thu 7 Sep 17

    14:00 - 16:00

  • Colchester Campus

    EBS.2.1

  • Event speaker

    Professor Douglas Cumming

  • Event type

    Lectures, talks and seminars
    Essex Finance Centre and BLG Data Research Centre

  • Event organiser

    Essex Business School

The Essex Finance Centre and BLG Data Research Centre are delighted to welcome Professor Douglas Cumming to our seminar series to present his paper, titled, 'Market Manipulation and Innovation'.

Professor Douglas Cumming is Professor of Finance and Entrepreneurship at the Schulich School of Business at York University , Ontario.

Professor Cumming has published over 90 papers in leading finance, management and law and economics journals. He is co-editor of Entrepreneurship Theory and Practice and will take over as editor-in-chief of the Journal of Corporate Finance from January 2018.

Event abstract

End-of-day price manipulation is associated with short-termism of the firm’s orientation, long-term harm to a firm’s equity values, and commensurate with reduced incentives for employees to innovate. Insider trading, by contrast, enables innovators to achieve exacerbated profits from innovation. Using a sample of suspected manipulation events for all stocks from nine countries over the years 2003-2010, we find evidence consistent with these real impacts of market manipulation on innovation. These findings are not attributable to “bad” firms innovating less and manipulating more, since the average firm subjected to manipulation in the sample is more innovative during the pre-manipulation period.

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