Price of regulations: Regulatory costs and the cross-section of stock returns

Name: Price of regulations: Regulatory costs and the cross-section of stock returns
Author: Ince, B., Özsöylev, Han Nazmi

İsim	Price of regulations: Regulatory costs and the cross-section of stock returns
Yazar	Ince, B., Özsöylev, Han Nazmi
Basım Tarihi:	2024-01
Basım Yeri	- Oxford University Press
Konu	G12, G18, G28
Tür	Süreli Yayın
Dil	İngilizce
Dijital	Evet
Yazma	Hayır
Kütüphane:	Özyeğin Üniversitesi
Demirbaş Numarası	2045-9920
Kayıt Numarası	6718375e-384a-410d-9cbd-012c56246066
Lokasyon	International Finance
Tarih	2024-01
Notlar	TÜBİTAK ; Science Foundation Ireland
Örnek Metin	Regulations introduce significant fixed costs and add to operating leverage. Fixed regulatory costs that contribute to operating leverage should generate a risk premium. To explore whether such a premium exists, we introduce a measure of "regulatory operating leverage" that reflects the importance of fixed regulatory costs in a firm's cost structure. Regulatory operating leverage predicts stock returns in the cross-section, and a zero-cost high-low regulatory operating leverage strategy generates positive and significant risk-adjusted return. Finally, the impact of regulatory operating leverage on returns is due to the (systematic) risk contribution of fixed regulatory costs.
DOI	10.1093/rapstu/raae001

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Price of regulations: Regulatory costs and the cross-section of stock returns

Yazar Ince, B., Özsöylev, Han Nazmi

Basım Tarihi 2024-01

Basım Yeri - Oxford University Press

Konu G12, G18, G28

Tür Süreli Yayın

Dil İngilizce

Dijital Evet

Yazma Hayır

Kütüphane Özyeğin Üniversitesi

Demirbaş Numarası 2045-9920

Kayıt Numarası 6718375e-384a-410d-9cbd-012c56246066

Lokasyon International Finance

Tarih 2024-01

Notlar TÜBİTAK ; Science Foundation Ireland

Örnek Metin Regulations introduce significant fixed costs and add to operating leverage. Fixed regulatory costs that contribute to operating leverage should generate a risk premium. To explore whether such a premium exists, we introduce a measure of "regulatory operating leverage" that reflects the importance of fixed regulatory costs in a firm's cost structure. Regulatory operating leverage predicts stock returns in the cross-section, and a zero-cost high-low regulatory operating leverage strategy generates positive and significant risk-adjusted return. Finally, the impact of regulatory operating leverage on returns is due to the (systematic) risk contribution of fixed regulatory costs.

DOI 10.1093/rapstu/raae001