Hazem Daouk

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Hazem Daouk is a financial economist, known for his work on securities regulation, especially insider trading, earnings management and short selling. He is a professor at Cornell University where he holds the Peter J. & Stephanie J. Nolan chair. His articles have been cited over 4,000 times (Google Scholar). [1] Daouk is the general manager of United Insurance Company. [2]

In 1998, his research uncovered the rampant insider trading on the Mexican Stock Exchange. [pub 1] [3] [4] This led to many questions about the value and the enforceability of insider trading laws. The study won the Best Academic Paper Award offered by the International Investment Forum at the University of Chicago.

In later research, Daouk conducted a comprehensive survey of insider trading laws and prosecution in about a hundred countries that have a stock market. He then showed that countries that enforce insider trading laws reduce the cost of financing of companies by many percentage points. This is because outside investors no longer require to be compensated for the money they lose from trading with better-informed insiders. On the other hand, having the law without enforcing it, does not do anything. [pub 2] [5] [6] [7] [8] This research was nominated for the Smith Breeden Prize for Best Paper in the Journal of Finance for the year 2002.

A little before the Enron scandal, Daouk was investigating whether informational risk associated with accounting earnings quality impacts stock markets around the world (he analyzed financial statements from 34 countries for the period 1985-1998). He found that accounting manipulation in a country, increases significantly the cost of financing of companies and reduces liquidity. [pub 3] [9] [10] He also found that the country with the most accounting manipulation was Greece. A year later, the European Commission issued a formal warning after Greece was found to have falsified budget deficit data in run-up to joining the eurozone. [11] A few years later, the Greek debt crisis started.

Daouk is also known for his research that documents short selling laws and practice in about a hundred stock markets in the world. The magazine The Banker has written that "Most Western regulatory bodies tend to subscribe broadly to the findings" of Daouk, which concluded that when short selling is possible, stock prices are less volatile and there is greater liquidity. However, in an interview with the same magazine, he stated that he did not oppose the temporary restrictions on short selling that were enacted in different countries in reaction to the financial crisis. [pub 4] [12]

Publications (selection)

  1. ↑ “When an event is not an event: The curious case of an emerging market” (with U. Bhattacharya, B. Jorgenson, and C. Kehr), Journal of Financial Economics , 2000, 55, 69-101.
  2. ↑ “The world price of insider trading” (with U. Bhattacharya), Journal of Finance, 2002, 57, 75-108. Reprinted in Claessens S. and L. Laeven (ed), 2006, “A reader in international corporate finance”, World Bank, Herndon, VA, USA.
  3. ↑ “The world price of earnings opacity” (with U. Bhattacharya and M. Welker), Accounting Review , 2003, 78, 641-678.
  4. ↑ “Market-wide short-selling restrictions” (with A. Charoenrook), Cornell University working paper, 2005.

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<span class="mw-page-title-main">Short (finance)</span> Practice of selling securities or other financial instruments that are not currently owned

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<span class="mw-page-title-main">Securities Exchange Act of 1934</span> 1934 U.S. legislation establishing rules and regulatory bodies for financial markets

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<span class="mw-page-title-main">Market manipulation</span> Deliberate attempt to interfere with and subvert the free market

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Craig Woodworth Holden is the Finance Department Chair and Gregg T. and Judith A. Summerville Chair of Finance at the Kelley School of Business at Indiana University. His research focuses on market microstructure. He is secretary-treasurer of the Society for Financial Studies. He is an associate editor of the Journal of Financial Markets. His M.B.A. and Ph.D. are from the Anderson School of Management at UCLA. He received the Fama-DFA Prize for the second best paper in capital markets published in the Journal of Financial Economics in 2009, the Spangler-IQAM Award for the best investments paper published in the Review of Finance in 2017-2018, and the Philip Brown Prize for the best paper published in 2017 using SIRCA data. His research has been cited more than 4,300 times. He has written two books on financial modeling in Excel: Excel Modeling in Investments and Excel Modeling in Corporate Finance. He has chaired 22 dissertations, been a member or chair of 62 dissertations, and serves on the program committees of the Western Finance Association and European Finance Association.

References

  1. ↑ Articles on Google Scholar. Retrieved 1 February 2017. Note: Authors of financial economics articles are listed in alphabetical order.
  2. ↑ "United Insurance Company, Hazem Daouk, new general manager" (March 2011). Atlas Magazine.
  3. ↑ Barnhart, Bill (March 12, 1998). “Inside Mexico”. Chicago Tribune , p. 6.
  4. ↑ Henderson, Barry (February 8, 1999). “Corruption? Caramba! Academics find widespread insider trading in Mexico”. Barron's , p. 22-23.
  5. ↑ “The cost of inequity” (January 22, 2000). The Economist .
  6. ↑ Beard, Alison (April 12, 2001) “Few countries enforcing insider trading laws”. Financial Times .
  7. ↑ Hoffman, Jascha (March 3, 2004) “Insider trading: A good thing?” Boston Globe .
  8. ↑ Ramsay, Ian (August 8, 2005) “ASIC's uphill fight to keep ‘em honest”. The Age .
  9. ↑ Popper, Margaret (July 22, 2002) "Economic trends: America the transparent". Bloomberg Businessweek .
  10. ↑ Weisser, Cybele Archived 2012-02-13 at the Wayback Machine (September 2002) "Word on the street: Homebound". Money , p. 37-38.
  11. ↑ “Greece profile - Timeline” (December 15, 2016). BBC .
  12. ↑ Beck, John (October 3, 2011) “Market controls: Does intervention work?” The Banker , cover story.
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